SAN FRANCISCO–What's the role of banks in the new mobile-payments model?

At the Mobile Banking and Commerce Summit here, some of the biggest players in the burgeoning mobile-wallet space wasted no time June 12 tackling that question. The query itself suggested banks still don't know enough about the power of mobile wallets and the potential benefits of partnering with their developers. PaymentsSource publisher SourceMedia spopnsors the event.

"Banks, telecoms and payment companies are part of the ecosystem as [participants]; at MasterCard, we want to work with Isis, Google and banks," said James Anderson, MasterCard Worldwide group head and senior vice president, who acknowledged the difficulty of a fully open mobile-wallet model among stakeholders who will retain some propriety. "A single wallet is unlikely, at least in a free market."

The mobile-wallet space also includes Google and banks such as PNC Bank and USAA Federal Savings Bank, which is working on expanded capabilities.

Since control of the processing rails and distribution of payments revenue is at stake, IDC Financial Insights research director Aaron McPherson once said in an interview that "whoever has control over the tech model gets to charge the rent." As such, mobile-wallet developers are vacillating between viewing other providers along the payments chain as competitors and seeing them as affinity partners. This has slowed development of open markets.

During the panel discussion, for example, Stefen Happ, general manager of online and mobile North America at American Express Co., acknowledged the competitive nature between firms but added "partnership is better … as opposed to exclusivity."

Isis, which earlier expanded its model to include card networks, has been working since to lure banks into the system as it preps for tests this summer in Salt Lake City and Austin, Texas (see story).

At the conference, Jim Stapleton, Isis chief sales officer, said the telco-led initiative, which is owned by Verizon Wireless, AT&T and T-Mobile, had signed up four banks thus far and is in talks with a number of others.

The mobile wallet enables banks to use Isis as a means to deliver loyalty offers and expanded services tied to payments, Stapleton said.

"The bank can put their brand in the wallet, and that exposes consumers to the bank's value proposition," he said.

Dan Schatt, general manager of financial services innovations at PayPal Inc., noted that the eBay Inc. payments unit is a "pass-through" for mobile payments. This allows PayPal's bank and merchant partners to extend new capabilities, such as barcode-enabled "near proximity" payments, transactions executed in an aisle at the store by scanning the phone over a product's QR code. PayPal developed the technology following parent eBay acquisition of RedLaser.

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