By Barry Levine / CIO Today. Updated March 09, 2012.
UPDATE: September 3, 2014
-- The company behind Isis Wallet has officially changed its name to Softcard. CEO Michael Abbot explained in a blog post that the company is rebranding itself because “however coincidental, we have no desire to share a name" with the extremist group responsible for the vicious campaign of violence in Syria and Iraq. The company had announced in July that it was looking for a new name to avoid association with the violent Islamic militant group.
Our original story from March 2012 continues below.
As the mobile wallet wars heat up, a newly approved patent could play a major role. Earlier this week, the U.S. Patent and Trademark Office published an approved patent to Apple for an e-wallet.
While patent No. 8,127,982 is entitled Parental Controls, and describes such embodiments as a parent setting up a prepaid account for a child, it could also be used in other contexts where there is a subsidiary financial account. These could include an employer setting up a mobile wallet for an employee, for instance. The patent also describes credit card statements that are sent directly to iTunes accounts.
iWallet for iPhone 5?
The rules for the use of the subsidiary account could include a time period, merchant categories or named retailers, geography, and so on. The main account holder can define the rules.
While that seems to constitute a relatively limited patent, some observers see the legal protection as being potentially broad. That viewpoint is based on the fact that, since purchases on a mobile device will be linked to iTunes accounts, users will be able to create rule-based transactions for themselves and others, all driven from iTunes.
The speculation includes the possibility that, just as the intelligent voice agent Siri was the key innovative feature in the iPhone 4S, an iWallet might play that role for the coming iPhone 5.
With mobile devices so prevalent, mobile wallets are now becoming a hot new territory, with several major companies and a variety of smaller ones jockeying for position.
Late last month, for instance, several major credit card companies announced deals with Isis, a joint venture based in New York City. The Isis Mobile Wallet is owned by AT&T Mobility, T-Mobile USA and Verizon Wireless.
In that announcement, Chase, Capital One, and Barclaycard said they will allow their credit, debit, and prepaid cards to be used in Isis, which will launch in the middle of this year. Isis announced deals last summer with the four major payment networks: Visa, MasterCard, Discover and American Express.
Like Google Wallet, which captured much of the press attention up to now, Isis provides a convenient and secure way to use a smartphone to pay for purchases, redeem coupons and participate in loyalty programs from retailers.
Transactions for mobile wallets are enabled by a tap of the phone to a merchant's near field communications reader. The phone must have NFC technology, which is beginning to appear on various models. Smartphone makers HTC, Samsung, and Research In Motion, among others, have committed to including NFC in their products.
Google's Wallet, launched in the fall of 2001, offers MasterCard credit cards from Citigroup, or a Google prepaid account. Google's mobile wallet is being tested in some markets, but is limited because it only has Citi participating and only works on some Android-based smartphones with NFC.
Digital wallet ventures have also been announced or are in trials from Visa, Ericsson/Western Union and others.