FORTUNE -- Can a million free smoothies save the mobile wallet?
That's the hope of ISIS, the mobile payments venture backed by major wireless carriers. ISIS has teamed up with Jamba Juice to offer a free smoothie or juice to the first million customers who use the ISIS mobile wallet app when it launches nationwide later this year.
Mobile wallets have not exactly been a runaway success. Major initiatives, like Google Wallet (GOOG), have been stuck in neutral, and efforts by PayPal and Square have not fared much better. Another venture, backed some of the nation's biggest retailers, only recently hired a CEO and has yet to announce plans for its launch.
ISIS, a joint venture of AT&T Mobility, Verizon Wireless and T-Mobile, launched its mobile wallet behind schedule a year ago in two test markets, Salt Lake City and Austin. It has said it would roll out the service nationwide later this year but has not given a specific date. Its app only works with Android phones equipped with NFC chips, but a sleeve with a built-in NFC chip will be available to bring the same payment capabilities to iPhones.
The marketing tie-in with Jamba Juice (JMBA), which has also experimented with some of PayPal's mobile payments services, is a flashy promotion meant to jump-start adoption of the ISIS wallet. By focusing the promotion on a single merchant whose customers often visit multiple times a week, ISIS may be trying to take a page from Starbucks (SBUX), one of the few retailers that has managed to migrate a sizable percentage of its customer base to mobile payments.
Getting people to use mobile wallets requires a change in habits, Jim Stapleton, chief sales officer for ISIS, said during a joint interview with James White, the CEO of Jamba Juice. "If you think about the frequency with which consumers go into Jamba, it's a great way to habituate a new behavior," Stapleton said.
Similar promotions in its test markets were successful in spurring wallet downloads and activations, Stapleton aid.
White said Jamba Juice will be rolling out point of sale terminals that work with the ISIS payment technology, called SmartTap, in its stores nationwide. The offer, "delivers significant consumer value and will spur rapid adoption of the mobile wallet," White said.
The free smoothies may well succeed in getting a million consumers to download the app. But after that ISIS may face the same fundamental challenge that other mobile wallet providers have experienced: Convincing consumers that tapping a phone is better than swiping a plastic card is no easy task.
Telecoms, banks, financial giants and startups -- plus Google and Apple -- are all scrambling to outflank and out-innovate each other in the mobile payments field.
By Stacy Cowley, CNNMoney tech editor
FORTUNE -- If you want to get a smackdown going, throw together five executives each angling for a lucrative piece of a $4 trillion market.
The retail payments space is one of tech's hottest battlefields. The reigning technology, magnetic stripes on MOREJul 19, 2011 8:46 PM ET
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