Isis, American Express want to turn your phone into a wallet

Isis will be integrating the American Express Serve payment application into its digital wallet, giving customers more flexibility in how they pay for things.

Pay with your smartphone at the cash register with the Isis mobile payment platform.

American Express is integrating its Serve payment application with the Isis digital wallet to give people more options for making payments, the companies said Thursday.

American Express and Isis had already been working together on the mobile wallet since 2011. And today the companies announced another aspect of that partnership.

When the Isis digital wallet launches nationwide later this year, customers will automatically have the option to open an American Express Serve account, which acts as an alternative to a bank account and allows people to pay bills online and digitally send money to friends and family.

Isis is a joint venture started by three of the four biggest wireless carriers in the U.S., AT&T, Verizon Wireless, and T-Mobile. The company has been developing a digital wallet that allows people to add credit cards, bank account information, and loyalty cards into a digital wallet that can be accessed through their mobile phones. Currently, Isis uses Near Field Communications, or NFC, technology to allow people to tap their phones to make payments, as well as collect and redeem loyalty program points and coupons.

Isis has been testing the digital wallet in Salt Lake City and Austin, Texas. The company announced last week that it will begin a nationwide rollout of the service later this year. Isis has not provided details on when this will happen or where the service will go first.

American Express' Serve is an application designed to provide an alternative to a bank account. Dan Schulman, group president for enterprise growth at American Express, said that the Serve application will appeal to the nearly 70 million Americans who don't have bank accounts or access to credit. And it's also likely to be used by people who aren't currently happy with their existing banking services.

The service allows people to directly deposit money to the Serve account or add it via other methods. And from this account, people can pay bills or other individuals. Using a plastic Serve card, people can also access the account to purchase items in stores or online.

And now through the partnership with Isis, they will be able to link the Serve account with their Isis digital wallet and use their smartphones to pay for things.

As customers sign up for Isis, they'll be given the chance at the same time to sign up for an American Express Serve account. When NFC technology is available at the point of sale, customers can simply tap their phone to access the Serve account and pay for things. But where NFC terminals aren't available, people can use a plastic card to make payments. Isis CEO Michael Abbott said it expands the reach of Isis.

"Now people can use their NFC-enabled phones where they can, and at the same time, they can use the card when an NFC terminal isn't available," he said in an interview."Through this partnership, our wallet will work with past, present, and future technology."

Isis is one of many companies going after the mobile payments market. Early on, the company began developing a system around NFC. But to date, the tap-and-go technology has been slow to take off. And many merchants don't have terminals that accept the payments. But Isis executives say they expect the technology to grow in usage, especially as more devices are released with NFC capability embedded.

Abbott acknowledged the company isn't tied to NFC. He emphasized that the company's wallet is open and technology agnostic. He added that some customers are already able to redeem coupons and loyalty rewards by showing merchants codes on their mobile devices.

Still, mobile payments in general have a long way to go. And several companies are clamoring for a piece of the action, including Google and PayPal. It will be interesting to see if partnerships will help drive adoption and growth as the Isis service rolls out nationwide.