News about a pair of separate mobile payments initiatives Monday suggest they're not just about transactions; marketing and advertising are part of the equation. One is American Express' unveiling its
new payment service, dubbed Serve, that will let users make person-to-person payments online (hello, PayPal!) purchases via
mobile device or PC.
Customers will also be issued a reloadable prepaid card for ATM withdrawals and physical store purchases, and Serve accounts can be funded from a user's bank
account, debit, credit or charge card. That includes cards from rivals Visa and MasterCard. Serve won't include any advanced mobile payments solution like Near Field Communication (NFC), though that
could come at a later point.
But a separate project involving Google, MasterCard and Citigroup would allow consumers to make contactless payments via Android devices embedded with NFC
chips, according to a Wall Street Journal report today. The venture also involves VeriFone Systems,
which would supply the digital readers that let customers pay by tapping their smartphones against the devices at checkout.
Bloomberg reported earlier this month that Google is getting
ready to roll out NFC-based mobile payment trials in New York City and San Francisco. In its partnership with MasterCard and Citigroup, Google wouldn't collect transaction fees. but would sell
targeted ads or discount offers to local merchants based on consumer purchase data. Those offers, in turn, would be aimed at driving additional purchases.
Likewise, American Express
eventually also plans to make targeted offers to consumers through Serve based on their shopping habits. Dan Schulman, Group President of Enterprise Growth at American Express, told the All Things D
blog that consumer data would have to be collected with users' permission, but that such a program would involve value-added services in connection with partners.
Serve is launching with
a handful of partnerships, including a deal with TicketMaster that lets users buy tickets to an event and get reimbursed by friends through the new service. More of these kinds of alliances are
expected in the coming months. With relationships with thousands of merchants worldwide and existing rewards programs for cardholders, American Express is well positioned to expand to targeted offers
via Serve.
But as Schulman noted, opt-in from mobile users will be a key part of any plan to tie marketing to consumer data. In that vein, Google's efforts may raise more eyebrows
because of the company's prior privacy-related controversies, from Google Buzz to Street View and its wider collection of search history and other online data. The recent malware attack that led the
company to remove more than 50 apps from its Android Market also didn't help Google's reputation for mobile security.
But the NFC-based transactions Google is focused on haven't caught
on to date for credit card transactions -- and it could be years, if at all, before contactless payments via mobile devices become mainstream. By contrast, Serve launched today in the U.S. and will
expand to international markets in the coming year.