Contactless credit card payments edged closer to the mainstream with the launch of Isis Mobile Wallet in Salt Lake City and Austin, Texas. A coalition of wireless carriers -- AT&T Mobility, Verizon Wireless, and T-Mobile -- rolled out the service to test users in both markets during the month of October. According to company statements, all three carriers expect to offer more than 20 different wireless devices with native Isis compatibility in time for the holiday shopping season.

The Isis Mobile Wallet replaces traditional magnetic stripe credit cards issued by American Express, Capital One, and Chase. After linking their Isis credentials to an eligible credit card, users can wave their NFC-enabled smartphones at contactless payment terminals bearing the MasterCard Paypass or Isis Ready logos. The coalition maintains a full list of participating merchants on its website at PayWithIsis.com.

Mobile Wallet improves security while offering convenience

In statements to reporters, representatives from Visa and MasterCard cited Isis' launch as an example of a new technology that increases convenience while improving personal security. Visa spokesman Bill Gajda said that Isis' open approach to mobile payments aligned with his company's vision to allow consumers the ability to enable contactless processing for existing, trusted accounts. MasterCard spokesman Mung Ki Woo said that Isis' rollout would create "better shopping experiences for consumers and merchants."

Industry analysts and technology pundits have speculated that wireless phone carriers could eventually use the Isis platform to offer direct billing for their customers, bypassing credit card issuers entirely. In the meantime, consumers without a credit card from Isis' three launch partners can still make contactless payments using a linked virtual prepaid debit card. Account holders can reload an Isis Cash Card for free via direct deposit, or by paying a fee of up to $4.95 at a merchant displaying the MoneyPak or Visa ReadyLink logos. Cards that go unused for more than nine months will incur a monthly maintenance fee.

Officials made no announcements about when the Isis service would work for consumers and merchants outside the two test markets. A competing service, Google Wallet, has already launched nationwide mobile payments through partnerships with large retailers who have already installed contactless processing terminals. Technology roadmaps published by Visa and MasterCard promise significant cost and risk reductions for merchants who adopt contactless payments as their primary transaction format within the next few years.