April 25, 2011
Amex On-Board with the Mobile Payments Market
The mobile payments market is continuing to heat up as more consumers are shopping directly from their phones. As a result, major credit card companies are working to be the first to set the standard of mobile payment technology with their own software. American Express has done just that by investing $19 million in the mobile payments provider start-up business, Payfone.
Useful Ecommerce Service
The technology provided by Payfone is expected to be a viable ecommerce service. The software will change the way in which consumer to merchant financial transactions are conducted. The owner and CEO recognize that mobile payments are soon to become a major cornerstone of digital payment strategies. The company is excited in enabling ecommerce operators to take part in the financial transaction flow.
A New Source of Revenue
Mobile payment technology will also allow merchants to take advantage of a new source of revenue. The goal of Payfone is to make mobile devices the top method of payment between merchants and customers. As consumers increase spending from mobile devices, this is a service that is critical to the continued success of electronic commerce.
Utilizing Cellular Network Security
Payfone utilizes the security of cellular phone networks to ensure customers have the funds or credit to pay for a product or service. This is the same method in which cell networks determine if individuals have the funds to make a roaming call. This allows the company to track transactional locations and user identification data. The result is a huge reduction in fraudulent charges and identity theft.
Setting the Industry Standard
Developed in 2008, Payfone’s mobile payment technology has the potential to create the standard in the mobile payment industry. Telecommunications companies believe in the product so much that organizations like Verizon Investments, Opus Capital, Rogers Capital, RRE Ventures and the Blackberry Partners Fund are strategically investing money into Payfone.
The Serve Platform
As per the agreement, Payfone will integrate the technology into a PayPal-like platform known as Serve which is owned and operated by Amex. This technology has emerged at a time when Near Field Communications (NFC) is exploding on the market resulting in more cellular devices coming equipped with NFC chips.
Mobile payment technology is a necessary function for all consumers that shop using their cellular devices. Therefore, Amex is making a smart move toward this technology before the marketplace becomes saturated with operators.
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