First Data Corp.’s recently announced partnership with a South Korea-based technology company will help strengthen the transaction processor’s ability to support contactless payments in advance of Near Field Communication-enabled mobile payments, according to a First Data executive.
The companies announced the deal on Sept. 16 (
SK C&C, a technology-service affiliate of the South Korea-based SK Group, has developed technology that would enable First Data to help its financial-institution partners to issue virtual payment cards consumers would download to an NFC-enabled handset. The technology would enable First Data to support multiple card accounts through the contactless chip on behalf of the banks. SK C&C also provides a mobile-wallet smart-phone application that consumers use to manage multiple card accounts through an embedded chip.
“When you talk about delivering payment accounts to the mobile handset, there is a new set of technology that needs to be in place,” Christopher Cox, First Data vice president of mobile product development, tells PaymentsSource.
The partnership assists Atlanta-based First Data in helping it to build its trusted service manager business, Cox adds. The trusted service manager works behind the scenes to make the entire process of downloading a payment account to a mobile phone both efficient and secure.
SK C&C has been providing the technology to financial institutions, retailers and mobile operators in South Korea since 2002.
First Data expects the services to be available in the first quarter of 2011. The company, like many others exploring the mobile-payments market, is waiting for the market to determine a business model that would satisfy multiple players.
“All the signs that we’re seeing [indicate] we’re expecting to see NFC-enabled mobile payments to be out in scale within the next few years,” Cox says.
When that time arrives, First Data will offer its service to financial institutions in the United States, Canada and Mexico.
Whether consumers embrace mobile payments remains to be seen. Some observers believe there is no consumer demand for mobile payments (
First Data believes otherwise. Cox points to NFC trials worldwide in which consumers have come away satisfied with the experience. “It’s easy for them to do, and they feel it’s secure and they like the technology,” he says.
The key to high consumer adoption will be the ability for banks and retailers to add incentives, such as loyalty rewards and mobile coupons, for using mobile payments, Cox adds. SK C&C’s technology enables First Data to offer those functions as well, he says.
What do you think about this? Send us your feedback.
