Visa Inc. said the endorsement of a mobile communications trade group will help it increase its share of the international money transfer market and help establish broader standards for the industry.
The San Francisco company is expected to announce today that the GSM Association has endorsed Visa as a provider of mobile money transfers. The London trade group represents more than 750 mobile phone operators that use the Global System for Mobile standard for wireless communications.
Visa, which is already working with the trade group on mobile tests, is not the first payment company to be endorsed this way. In 2007, Western Union Co. signed an agreement to develop international transfer services with the GSM Association. And Visa is one of three partners the trade group will name today; the other two are Royal Bank of Scotland Group PLC and Belgacom International Carrier Services.
Visa executives said the increased relationship with the GSM Association will help it develop its mobile payments and money transfer strategies.
Money transfers especially have been moving up the agenda for Visa, which last year unveiled a number of initiatives to test card- and phone-based transactions in the United States and abroad. (Most U.S. wireless carriers, except AT&T Inc. and T-Mobile USA, use the CDMA format, while the rest of the world prefers GSM.)
"This relationship will help us accelerate the delivery of services and get it right," Pam Zuercher, Visa's head of mobile initiative, said in an interview Tuesday from the four-day GSMA Mobile World Congress in Barcelona. "We think there's an enormous opportunity for synergies between two of the largest networks in the world: mobile and financial services."
The endorsement recognizes that "what Visa does well today is move money," Ms. Zuercher said. "Because the network is already established, they certainly see the opportunity to leverage" it.
Visa already works with the GSM Association to test mobile payments at the point of sale. It has started tests in Canada, Switzerland, France, and the United Kingdom, and it has completed trials in Australia, Malaysia, and Taiwan.
Elizabeth Buse, Visa's global head of product, said in a press release that the tests "have enabled us to refine the technology, security, and processing requirements necessary to make mobile payments a reality."
Visa said Tuesday that its new relationship with the GSM Association will take that collaboration a step further to develop international standards for mobile transfers and payments and to help financial institutions enter the market for such payments more rapidly.
Ms. Zuercher said Visa and the GSM Association would be establishing a working group to define the standards and to identify and address gaps in the mobile payment infrastructure. "There's been a lot of focus to date that's centered around contactless." However, "as we're really looking at mobile as a channel, there's additional standards work that needs to happen," she said. "It's really critical that we've got this partnership in place, so that we have the opportunity to make sure that the standards we have in place will work for both."
She also said establishing such standards would benefit many different companies. "Mobile as a channel requires us to work with multiple providers. … This allows us to more deeply work with the operators."
Bill Gajda, the GSM Association's chief commercial officer, said in the Visa press release that the company's "comprehensive mobile strategy, its extensive experience in enabling consumers to transfer funds across borders and domestically, combined with its flexible approach, were deciding factors in our selection."
