ORLANDO — Some bankers and credit card executives see mobile payments as a threat to their future profits, but Citigroup's (NYSE: C) Bill Johnson is more worried about the impact on retailers.

That's Johnson's job. The longtime head of the Citigroup unit that issues credit cards on behalf of merchants counts Macy's (NYSE: M), Home Depot (HD) and Sears (SHLD) as some of his biggest customers. But Johnson's concerns about merchants are somewhat unusual in a banking industry that has repeatedly clashed with retailers over issues ranging from interchange fees to fraud liability to the future of how customer payments will be processed.

"Literally every day, there are dozens of new entrants [into the payments market] … and they are challenging the customers, the retailers, and us as facilitators," Johnson told an audience of bankers, card executives and analysts on Thursday morning.

"Right now, I think that there's a lot of frustration [among retailers] … they're worried about who owns the data, who owns the relationship" with their customers and "they're getting pulled into data breaches," Johnson said.

Meanwhile, new competitors, including technology and mobile phone companies, are trying to offer customers alternative ways to make payments online or with their phones, compounding a "strain in the relationship" between banks and retailers, Johnson said.

He added that 63% of smartphone users visit retailer sites on their phones, and 41% of those people do so while they're in the merchants' physical stores.

But Johnson, who shepherded Citigroup's retailer credit card business through an uncertain future after the financial crisis, also had some optimism for both banks and merchants.

The U.S. banking industry is now "much healthier" than it has been over the last three or four years, he told American Banker in an interview after his speech. Citigroup's retailer partners are also thriving he said, adding that Macy's especially "is doing better than the industry at large."

Citigroup put its retail partner cards unit up for sale in 2009, but late last year re-committed to the business and brought it back into its main "Citicorp" operations. Johnson has since remained in charge of the renamed "retail services" unit, and has signed up some additional partners, including Ford Motor Co. (NYSE: F).

He would not discuss specific areas where he is interested in expanding Citigroup's retail services business, saying that he looks more at specific potential partners than at industries or market segments.

Partnership stability is very important, and "obviously we're always concerned about financial health and well-being" of retail partners, Johnson said in the interview. "It's more about the long-term health of the relationship."

He acknowledged that, like all types of credit card issuers, Citi's retail services unit is spending a "significant" amount of time dealing with new regulations.

Johnson spoke at the Card Forum and Expo, an annual conference sponsored by American Banker and its publisher, SourceMedia.