According to a top AT&T executive speaking with Reuters, new debit card regulations have seriously impaired the efforts of US mobile carriers to compete in the payments processing industry against the formidable likes of Visa and MasterCard.
“Some changes in the banking laws occurred with the amendments that were put in with the Dodd-Frank bill … As transaction fees were limited and things were changed, it kind of changed the business model,” said John Stankey, AT&T’s head of business solutions.
As reported by Mobile Marketing Watch on May 4th, major US wireless carriers, including Verizon Wireless, AT&T, and T-Mobile USA, appeared to be pulling the plug on their jointly proposed Isis nationwide mobile commerce network.
Rather than moving full-steam ahead on smartphone-enabled point-of-sale transactions, simpler mobile payment solutions in line with the so-called “mobile wallet” framework now appears to be the widely embraced mechanism by which the consumer shopping experience will be revolutionized.
Initially, Isis was formed to establish its own payments network, which would be profitable by collecting fees on transactions. Mobile customers would have payment accounts through their wireless carrier, instead of a credit card company.
Stankey, without question, is directing no shortage of blame for the scaled back endeavor at the Dodd-Frank financial reform law, which makes payment processing less profitable.
Regardless of the new, modified venture, Stankey says he remains supportive of the effort and that Isis “had always planned to be open to working with all parties over time.”
“Frankly, it just happened a little bit sooner than probably what we would have guessed,” Stankey said.