Over the past five years, people have become accustomed to buying apps, games, and songs on their phones. Even so, only about 7 percent of retail sales occur online, compared to $4 trillion that is still spent in person at stores. “We’re going after the 93 percent,” Bedier says.

The biggest prize may be the chance to reach consumers at the very instant they are deciding what to buy. Both Isis and Google plan on using their mobile wallets to offer promotions that, like Web advertisements, could be highly personalized. Retail advertising accounts for around $200 billion a year in spending—very little of which is yet channeled through mobile phones. 

The companies are now in a race to get merchants to install software into the new checkout terminals, so that their wallets are accepted and they can manage sending advertisements and loyalty points back to consumers. 

With dizzying profits at stake, tensions are on the rise. Late last year, Verizon—a member of Isis but also a big seller of Google’s Galaxy Nexus phone—asked Google to disable the wallet app on phones sold at its stores. Google, which backed down, downplays the significance of the disagreement. “You’ve got to remember, this is very early days,” says Bedier. “The whole space is going to explode. There will be a lot of room for Isis and Google.”

Google has had missteps along the way, including security glitches (since patched) that could have allowed phone thieves to go on electronic spending sprees. Bedier says those real-world experiences have helped strengthen Google’s wallet. “We’ve solved issues that were not caught when it was theoretical,” says Bedier. “Now we’ve got a commercial, viable product that works in the wild.” 

At Isis, Johnson predicts the carriers’ wallet will hit the market with its technology, and business arrangements, already sorted out. When it launches, the carrier alliance will bring an armada of partners: all the major credit card brands, three banks with 100 million customers, and makers of merchant terminals and phone handsets (Apple is not among them).

“Isis is not solving a technology problem,” says Johnson. “What’s important is to make it work at scale. You need multiple parties to work together for this to be a good consumer experience. Scale is crucial to get mobile commerce off the ground.”