NEW YORK - Two-dozen retailers, including Walmart and Target, have joined forces to develop a mobile payment service, an effort to go head-to-head with Google Wallet and Isis.

As we have reported in NACS Magazine, the race to control mobile payments is fierce, with banks, credit card networks and phone companies all investing efforts in the technology. The market for mobile payments is estimated to exceed $600 billion by 2016, according to an industry-sponsored estimate.

Launching a merchant-controlled app is significant, for the issuer of each mobile payment service controls user data as well as any commensurate swipe fees. Recall the ongoing interchange fee fight, which is sufficient to understand the motivation for retailers to control their own payment system.

"A number of merchants are surveying the first generation of solutions and have decided they need to and can build a better system," said Steve Mott, who runs BetterBuyDesign, a Stamford, Conn.-based consulting firm that is working with the retailers on the payment system.

Executives from Isis and Google applauded the move €" at least publicly €" saying a new competitor will help propel the new industry.

"We think it's great that there are other companies innovating in the payments space. This will create more choice for consumers, and in the end we believe choice is a good thing," said a Google spokesperson.

Mott said merchants have expressed concerns about security and privacy risks in the existing services, while touting their own insights to help offer a better consumer solution. "What we see out there doesn't make us very happy," said one executive who is involved in the merchant venture.

Besides Walmart and Target, the Journal said the list of other merchants participating in the service is not known, though an unnamed source said Alon Brands Inc., operator of more than 300 7-Eleven stores in Texas and New Mexico, is also a participant.

Mott said participants have combined annual revenue of $1.38 trillion and include a variety of retailers: big-box stores, drugstores, vending companies and QSRs.

"We are exploring potential solutions that would help us to deliver the fastest, most secure mobile-payment experience possible for our customers," Target said in a statement. The company "isn't prepared to share specific plans publicly at this time."

Earlier this month, PayPal announced it is rolling out its digital wallet in The Home Depot stores.