Verizon Wireless is announcing today a partnership with American Express that enables its 100-million-plus mobile subscribers to pay for digital or physical goods online using their phone number. Subscribers enter their phone number and a pin code at checkout, rather than entering a 16-digit credit card number, explains the Wall Street Journal.
It will work for shopping on any Internet-connected device, including a PC, phone or tablet. Unlike other initiatives, designed to let consumers pay by tapping their phone to a payment device at a store, Serve will let buyers make online purchases while on the phone.
Subscribers must sign up for a Serve account through American Express. It’s similar to a PayPal account and can be funded by a bank account or a credit card. Verizon subscribers be required to have a Serve account, and online retailers also have to integrate Serve as a payment mechanism.
Verizon Wireless has also formed a joint venture called ISIS with AT&T and T-Mobile USA that will launch a near-field communication trial next year. The Google Wallet initiative is also available in select cities this summer. It is partnering with Sprint, MasterCard, Verifone, and a number of retailers.
Greg Haller, Verizon’s president of enterprise and government, said its partnership with American Express is not designed to compete with its ISIS joint venture. “We’ll still allow virtual goods to go on the bill, but the real opportunity now going forward is that a customer won’t have to go in a shopping cart and enter a 16-digit number. This really turns it into a one-click process.
“We are preloading a number of devices — smartphones or tablets — with the Serve app, and when you preload there’s a much greater uptake,” said Dan Schulman, group president, Enterprise Growth, American Express. “They’ll be able to simply or easily transact for any size good, whether it’s a virtual good or hard good.”
Schulman declined to say how many customers have signed up for Serve since it launched in April, but said that the deal with Verizon Wireless is not an exclusive, meaning it could partner with other carriers in the future.
Up until now, most items charged to a carrier bill are ringtones, or virtual goods that are purchased inside online games.
Juniper Research forecasts mobile payment (for digital and physical goods, money transfers and NFC) sales over the next three years will reach $670 billion in total transactions by 2015. This year, mobile pay commerce totaled $240 billion, so growth is expected to triple over that time frame. The top 3 regions for mobile payments (Far East & China, W. Europe and N. America) will represent 75% of the global mobile payment gross transaction value by 2015, Juniper says (pdf).
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