It seems that Visa, MasterCard and American Express are safe… FOR NOW!
Back in November, a fresh-faced youngster (yours truly) brought you news of a joint venture between AT&T, T-Mobile and Verizon known as “Isis.”
The idea was that these three mobile companies would offer pay-by-phone features using near-field communication (NFC) chips embedded in their handsets. Payments would be handled by—dun, dun, dunnnh!!!—Discover card terminals. Nobody asked Sprint to play along, either. Poor Sprint.
It actually didn’t seem like an awful idea, given that the group had worked out how it was going to talk merchants into accepting these mobile payments. Merchants didn’t have to do a thing, provided they had one of Discover’s 7 million compatible terminals installed at their stores.
But the Wall Street Journal is now reporting that apparently “many merchants were cool to the idea, since Discover is a small player that lacks the reach of Visa and MasterCard.”
Instead of trying to handle phone payments on their own, the Isis group is now reportedly trying to talk Visa and MasterCard into coming on board as well. That means that the Isis system would now basically work in the background instead of actually handling transactions (and taking lucrative percentages of each payment).
Says the Journal:
“Now, the group has adopted the less ambitious goal of setting up a ‘mobile wallet’ that can store and exchange the account information on a users’ existing Visa, MasterCard or other card, people familiar with the matter said. The carriers are scrambling to find other ways to make money from the transactions.”
Aside from Isis not being able to make as much money of its system now, it might actually be easier to pitch to consumers. Instead of paying for things through your cellular carrier, you’d still have your physical credit card and, if you wanted, you could link it to your cell phone to handle transactions. The actual exchange of money would happen just like it always has, though.
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