A Place For Marketing In Mobile Payment Plans


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.

2 comments about "A Place For Marketing In Mobile Payment Plans".
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  1. Vicki Zerbee from, March 28, 2011 at 8:20 p.m.

    It seems like mobile payments have been used outside the US for awhile now, though many folks here don't trust it yet. We like easy and quick but we don't like breaches of security that can affect our money - or the time it takes to fix things when they go wrong.

    What I really like about my phone these days is getting coupons from businesses, stores, restaurants, etc where I do business. Saving money with my phone is a good thing. I hope more smaller business start using text message marketing - it's not just for big companies.


  2. Chris Hedick from Consultant, March 29, 2011 at 12:37 p.m.

    I first heard about mobile payment systems in 1999 and incorporated it into a business plan for a start up. The advantages are myriad and I can't understand why someone with deep pockets (Google, Microsoft) doesn't push this technology. For example, tempt retailers to adopt it by offering no transaction fees for the first 6 months. Google and Bing know everything we search on, what's in our email, etc. The missing piece is what we actually buy. With that information their ad targeting would be nearly perfect. The future was yesterday, let's make it happen tomorrow.

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