Do you remember Isis? No, not ISIS, the terrorist organization that is now at risk of reconstituting; Isis, the consortium set up by three of the four national U.S. wireless carriers nearly a decade ago to create a new mobile payment network that leveraged NFC and whose principal purpose was to allow said carriers to skirt credit card processing fees. Isis would eventually rebrand itself as Softcard in 2014 to avoid any association with the Islamic State of Iraq and Syria before ultimately shutting down in 2015.
Yeah, this might end kind of like that, except without the violent undertones.
Image source: Apple.
Catching up with iMessage
All four carriers -- AT&T (T +0.07%), Verizon (VZ +0.02%), T-Mobile (TMUS 1.40%), and Sprint (S +0.00%) -- announced last week that they are forming a new joint venture called the Cross Carrier Messaging Initiative (CCMI) to support the burgeoning Rich Communications Service (RCS) standard, which many hope will replace the antiquated SMS messaging standard that has been around for decades.
Up until now, carrier support around the world has been mixed, and Alphabet (GOOG 0.20%) (GOOGL 0.57%) subsidiary Google had said in June that it would take the lead in deploying RCS on Android, the most popular mobile operating system on the planet. RCS has the potential to make Android text messaging a little bit more competitive with Apple's (AAPL +0.11%) iMessage, which is now over 8 years old.
Apple's messaging service has evolved dramatically over that time, and iMessage has become a powerful differentiator for iOS while Android messaging has long been a complex mess. iMessage alone is enough to keep some iOS users from defecting to Android, and in some cases bring switchers back into the Cupertino tech giant's walled garden.
In no uncertain terms, Apple modeled iMessage's development after messaging platforms in Asia, where companies have created expansive platforms (e.g., Tencent's WeChat). In a statement, Sprint CEO Michel Combes noted, "As we have seen in Asia, messaging is poised to become the next significant digital platform." Apple hasn't said much about RCS one way or the other, but is rumored to be open to including RCS support in order to improve the experience of iOS-to-Android messaging.
RCS will support features that iMessage users have enjoyed for years, such as typing indicators, improved group chat functionality, and high-resolution attachments. End-to-end encryption is not part of the standard yet, so companies that do offer encryption by default still have the upper hand with privacy. RCS will also enable companies to chat with consumers, akin to iMessage's Business Chat.
CCMI says it expects to deploy an RCS-based messaging app in the U.S. on Android in 2020.
With our powers combined
There are a lot of reasons to be skeptical of how RCS will be adopted and deployed. The announcement was short on a lot of key details. Wireless carriers don't have a strong track record of working together due to disparate incentives -- Softcard was shut down less than six months after Apple launched Apple Pay -- and they're not particularly good at making apps.
However, the carriers have a much stronger reason to get it together: Messaging is a fundamental part of their business, while mobile payments never were. Hopefully, CCMI won't suffer the same fate as Isis. Android users need an upgrade.
