Subway sandwich shops are using Paydiant's mobile payments, offers and loyalty platform as part of the restaurant chain's mobile wallet app, which it plans to launch this year.

"Although nobody really knows if Google, Isis or PayPal is going to get any traction [with their mobile wallets], it's clear that retailers want some of these capabilities in their own apps," says Chris Gardner, co-founder of Paydiant.

Paydiant offers a white-label platform that functions in the cloud, allowing retailers to offer payments and rewards within their own branded apps. Its technology also integrates directly into a merchant's existing point of sale systems.

Merchants are sensitive about working with a third-party wallet that collects customer data, Gardner says. "If push comes to shove [retailers] don't particularly want those other companies, such as Google, in between their transactions."

The Merchant Customer Exchange (MCX), a retailer-driven mobile commerce initiative, was founded on the principle that merchants want to keep control of shoppers' payment and rewards data, he says.

Starbucks' success shows that consumers are receptive to retailer-branded mobile wallet apps, Gardner says. "It's not just payments, it's filling the cup with gold stars … it's consumers interaction and engagement with the brand that works," he says. Starbucks reports that 10% of its U.S. transactions are made through its mobile app.

Dunkin Donuts is also seeing success from its mobile payment app. More than 3 million customers have downloaded the app and it continues to be a driver of sales, Dunkin Brands says.

Merchants including Wendy's and Dairy Queen have launched mobile apps with payment functionality this year. And McDonald's has launched several mobile payment systems outside the U.S., including Canada, Kuwait and Sweden.

There are not many vendors of white-label mobile payments and rewards platforms, especially for large chain retailers like Subways, Gardner says. Paydiant will be announcing several other restaurant chain relationships by the end of the year, he says.

Paydiant's competitors include LevelUp, which offers a white-label version of its mobile payments and loyalty app. The Cambridge, Mass.-based company developed an app for sweetgreen salad shops, and LevelUp also built First Trade Union Bank's FT Pay wallet.

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