Only a couple of hours into his new job as First Data's CEO, Frank Bisignano was already plotting a strategy to deal with the historic impact of mobile technology on the payments industry.

"Mobile is the future and we're already in it," says Bisignano, who was announced as First Data's CEO on April 28. Bisignano, previously JPMorgan Chase's co-COO, plans to meet with First Data's customers and employees to develop a path forward for mobile technology and other initiatives.

"We're a tech firm and will invest in tech and spend a lot of time with customers finding out what they need," he says.

Bisignano's professional background in financial IT at JPMorgan Chase, and previously at Citigroup, will also be helpful as payments processing as a core business becomes more commoditized, says Philip Philliou, a payments consultant.

"It's very difficult for processors to differentiate themselves, the differentiation will come from data analytics…and new technology such as mobile and cloud-based solutions that take advantage of advanced data," Philliou says. "Bisignano's skillset appears to be managing exactly this type of business. [First Data] needs somebody to push the envelope on the mobile wallet. How do you integrate marketing with merchants and processing?"

In addition to the technology challenges, First Data must also manage its corporate culture and how it approaches the 'make, buy or partner' technology decisions within the company, says Richard Crone, a payments consultant.

Mobile will further challenge the core processing infrastructure of First Data because authentication and access to account credentials can be done directly with core processors via products like FIS' PayNet solution—which poses a challenge to First Data's market position, Crone says.

First Data will also have to upgrade its mobile wallet strategy, Crone says. Whereas many companies are looking at software-based approaches to mobile payments, First Data has largely supported Near Field Communication and trusted service manager technology and models companies such as Isis and Google, he says. 

"[First Data] has completely missed the opportunity to bolster First Data's most important stakeholders …namely credit and debit card issuers and retailers—that have their own mobile wallets," Crone says. "Even though First Data runs the largest 'cloud' in the payment processing business, it has done nothing to support cloud-based mobile payments driven directly from the mobile banking apps of their processed financial institutions or retailers in their own mobile shopping apps."

Bisignano did not reveal specific details about how First Data will adapt its mobile wallet strategy. He also would not address how it plans to manage its relationships with independent sales organizations and other partners, but said the company would "think about those kinds of details" in the coming months.

"The biggest opportunity relates to the integration of payments and marketing into a single solution," says Rick Olglesby, a senior analyst at Aite Group.

Acquirers and processors have an opportunity to deliver broader and more valuable offerings to merchants via mobile, such as enhanced in-store servicing, customer acquisition and customer loyalty services, he says. First Data has already entered into a partnership with Foursquare to combine marketing and payments.

"On the challenge side [for First Data], there's a lot of infrastructural updates that need to be made, and there are many potential solutions. And there is no guarantee that merchants or consumers will adopt any of them," Oglesby says. "So while sitting and waiting could cause acquirers and processors to miss out on large potential opportunities, moving too aggressively could also cause them to lose a bunch of money by investing in the wrong technologies."

First Data has advantages from its scale and presence in the market, Oglesby says. "As the largest player in the acquiring and processing space, the decisions that they make will in turn influence the decisions that other make, so they are in a position to lead the market in a particular direction."

First Data's prior CEO is staying with the company. Ed Labry has been serving a dual role as both president of Retail and Alliance Services and interim CEO since Jan. 28, 2013. Labry will continue in his role as president of Retail and Alliance Services.

"[Labry] runs the 'partner' part of the growth strategy. Ed's focus has been on powering new entries and third party intermediaries," Crone says, adding that 'third party' focus has caused angst in the merchant and bank communities.

"In my view Ed has done an incredible job over the past 90 days galvanizing this place, we will work shoulder to shoulder," Bisignano says. "I spoke with him this weekend and started talking about operations…we will be better off the two of us doing this together."

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