Mobile Payment Consortia

SiliconAngle reports that Paydiant, a Boston-based mobile payments start-up, has raised $7.6 million in a first round of funding led by North Bridge Venture Partners and General Catalyst Partners. The financing will be used to expand product development, sales and marketing.

Paydiant was co-founded by Chris Gardner, Kevin Laracey and Joe Paratore, all having previously collaborated in the e-billing, payments and mobile space. 

The mobile payment market is a very competitive one, with service providers like AT&T, T-Mobile and Verizon all getting involved. Techie Insider mentions that Isis, the mobile giants' new joint mobile payment venture, has already recruited several US merchants, giving it a head start over Paydiant as well as backing from the largest players in mobile.

Moreover, Visa, Deutsche Telekom AG, France Telecom SA and other mobile operators have partnered with Google to launch near- field communication (NFC) payment systems in the near future, according to Bloomberg, which will let people buy in suitably equipped retail locations with a swipe of their smartphone. "NFC may be the last chance for operators to avoid being simple conduits of other companies’ electronic commerce." Notes Bloomberg: “'Google’s massive, but Google does not have a billing relationship with 99 percent of its customers,' Deutsche Telekom Chief Technology and Innovation Officer Ed Kozel said in an interview last week. 'That’s our opportunity.'

"The stakes for losing out on this business development are huge, with NFC payments -- which could potentially replace many cash registers and credit cards -- likely to account for a third of the $1.13 trillion global market in mobile transactions by 2014, according to IE Market Research."

According to Bloomberg, Deutsche Telekom may buy a payment-processing company for its NFC project or partner with a financial institution. France Telecom, along with other French mobile operators, began an NFC experiment in May in Nice. CEO Stephane Richard said  the Paris-based company is offering new SIM cards for contactless mobile services and expects to have 500,000 clients this year.

"For Google, whose Android operating system is activated by about 300,000 new users a day, mobile payments are a 'mega- scale' opportunity, CEO Eric Schmidt said at the Mobile World Congress in Barcelona on Feb. 15."

Bloomberg also notes that "Apple recently hired Benjamin Vigier, an NFC expert, from mobile-payments startup mFoundry, sparking speculation the iPhone maker also has NFC plans. Apple already has an extensive billing system through its iTunes entertainment and apps portal. Still, Apple’s preference for proprietary systems may be a hurdle, said Deutsche Telekom’s Kozel."

Regarding ISIS, Bloombert points out that "The system will be made available to all banks and merchants with help from Discover Financial Services and Barclays Plc -- posing a possible threat to parallel efforts by Visa and Mastercard Inc."