American telco Verizon wireless taps Amex in bid to expand mobile payment presence

Verizon Wireless said on Monday it will use technology from American Express Co. for mobile phone payments, a move that underscores a growing realization among telecom carriers that they need help from financial institutions in the burgeoning mobile payments market. The Verizon-Amex partnership will enable customers to use Amex-designed payment software called Serve on mobile phones and tablet computers. Amex unveiled Serve, which will come preloaded on Verizon Wireless phones and tablets, earlier this year.
Serve enables users to send and receive money from mobile devices, using accounts provided by Amex. This makes a seamless process for our customers," said Greg Haller, president of Verizon Wireless's enterprise and government operations. Verizon is jointly owned by Verizon Communications Inc. and Vodafone Group PLC.The partnership comes as telecom companies, financial institutions and Internet companies strike alliances as they jockey for place in the growing mobile payments field. Many are creating "digital wallets," mobile phones and tablets that contain users' financial details. Google Inc., for example, recently teamed up with Sprint Nextel Corp. to provide a payments service for phones based on its Android operating system.Meanwhile, financial institutions, including Bank of America Corp. and Wells Fargo & Co., have established a service for transferring money between checking accounts using a mobile phone.Last year, Verizon committed to Isis, a joint venture with fellow telecoms carriers AT&T Inc. and T-Mobile USA that aims to build a mobile payments network. Isis was seen as an attempt by the carriers to maintain independence from financial companies by encouraging users to keep accounts directly with the carriers.
The alliance, however, loosened earlier this month to include card companies, including Amex. Amex had previously partnered with Verizon rival Sprint Nextel Corp. to provide Serve. Haller said his company's deal with Amex would distinguish it from the Isis partnership because of the way Verizon customers would be able to use Serve. Verizon's service will be available anywhere, while Isis is limited to in-store purchases facilitated by the system's near-field communications technology. Forrester Research analyst Charles Golvin says the carriers' decisions to partner with card companies on mobile payments was inevitable."It's a dose of reality setting in," Golvin said. He added that some customers might have balked at a Verizon requirement that they set up new payment accounts separate from their existing cards in," Golvin said. He added that some customers might have balked at a Verizon requirement that they set up new payment accounts separate from their existing cards.

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