Pay-by-Phone Dialed Back

The biggest US wireless carriers are scaling back a joint venture for mobile payments that they originally hoped would compete with Visa Inc. and MasterCard Inc., reaffirming the traditional credit card companies' clout in the nascent market for mobile transactions.

The venture known as Isis, formed by AT&T Inc., Verizon Wireless and T-Mobile USA, initially aspired to set up its own payments network and collect fees on every transaction. Customers would maintain accounts directly with their wireless carrier, rather than with a credit card company. Now, the group has adopted the less ambitious goal of setting up a "mobile wallet" that can store and exchange the account information on a users' existing Visa, MasterCard or other card, people familiar with the matter said. The carriers are scrambling to find other ways to make money from the transactions. To get as many users as possible, the carriers are now in talks with Visa and MasterCard to have them participate in the system they will embed in phones.