The marketplace is rocked by the shocking news that a major player has dropped out.
The CEO of VeriFone, Doug Bergeron, has stunned the direct-to-micromerchant mobile payments world with the announcement that it is stepping out of that marketplace following unprofitable results from its Sail service.
The point-of sale provider’s mcommerce news came as a surprise to the majority of the industry.
As VeriFone had dedicated a great deal of last year and much of this year on the promotion of the growth of mobile payments services, the decision that the company has now made to remove itself from that direct-to-micromerchant space has caused many heads to spin. The announcement was made during the most recent quarterly conference call.
The CEO released the mobile payments news that the company is stepping down.
During the call, Bergeron stated that Sail, its own mobile payments service, has been unprofitable. This program had been giving small businesses the ability to use smartphones and tablets to accept transactions through debit and credit cards. He said that “Customer acquisition costs, either through search engines or TV advertising, cannot and will never justify the razor thin margins produced by merchants with infrequent volumes and extremely high attrition.”
The NFC technology community has also been left blinking in surprise, as it had been looking toward that company to propel forward its adoption, particularly after the iPhone 5 was released without its capabilities.
Bergeron described the mobile payments program at VeriFone as a failure and is now causing many of the other players in the industry to take a second look at their own potential for profitability. This is particularly the case after the CEO questioned the ability of the environment to be profitable at all. The company has announced that all of its assets from that space will now be sold off.
He explained that he felt it is possible to see similar thoughts among the competition as their businesses models are shifted toward wallets services. It is his belief that the only mobile payments players who will be able to survive “this fundamentally challenging business model” will be those who are capable of offering micro merchants other services, as well.
Isis platform prepares for launch this month
There is a lot of attention surrounding mobile commerce and the various platforms that are becoming available to consumers, allowing them to participate in the burgeoning industry. Consumers have proven themselves to be keenly interested in the concept of using their mobile devices to make payments for goods and services, thus boosting the demand for mobile commerce platforms. Google has already launched its own platform, successfully attracting consumers from around the world. The company will soon face its most significant competition in the industry, however, as the Isis platform prepares for launch later this month.
Challenges facing platform may have been overcome
Isis is a mobile commerce platform and joint venture from AT&T, T-Mobile, and Verizon Wireless. The platform is much like other of its kind; it is able to facilitate mobile transactions using NFC technology. Unlike other platforms, however, Isis has managed to acquire the support of most of the world’s major credit and financial institutions. Despite this support, the launch of Isis has been delayed several times in the past, largely due to concerns regarding security and the viability of the features it offers.
October 22 marks beginning of aggressive promotional campaign
Isis is currently conducting trials of its platform in New Jersey and international markets, and believes that the time is quickly approaching for an official launch. As such, Isis has announced that it will launch to the commercial market on October 22 of this year. That day will mark the beginning of a near-month long promotional campaign in which consumers can purchase certain NFC-enabled mobile devices at a significant discount and receive a Visa pre-paid card that will be used with the platform.
Isis may be able to beat out Google in mobile commerce industry
Isis is poised to be the most significant competition that Google and other companies invested in mobile commerce will face. Backed by the support of a multitude of financial and credit organizations, the platform has already established a strong attraction with consumers. Moreover, Isis has been working hard over the past several months to educate consumers on how to use the platform to conduct mobile payments, something that other companies have not done.
