April 18, 2013

Though still a small percentage of overall payment types, mobile payments adoption continues to rise at a strong pace, as more institutions seek to enter the rapidly growing mobile payments arena.

This week, Web giant Amazon filed a patent for an unnamed mobile payment system.

According to the filing, the system would "enable a user to make and/or receive payments without disclosing personal or private information to another party. In some aspects, a provider of a payment may request an anonymous payment for a specified value from a host. In response, the host may transmit to the provider a code that is available for redemption. The provider may then relay the code to a recipient, who may redeem the code from the host. In other aspects, a recipient may request a temporary identifier (special code) from a host. The recipient may relay the temporary identifier to a provider, who may in turn transmit a payment, via the host, using the temporary identifier. The recipient may then claim the payment from the host."

The e-commerce giant has begun focusing more on the payments space recently. In February, Amazon announced it would create its own virtual currency for apps on the Kindle Fire.

Meanwhile, the Merchant Customer Exchange (MCX) announced that it has chosen digital security vendor Gemalto to build the platform for the group's previously announced mobile wallet. The MCX is a consortium of U.S. retailers -- including Wal-Mart Best Buy and Target -- who have come together to form a new mobile commerce platform.

The MCX will also use Gemalto's software for the app and development kits to enable retailers to embed the wallet functionality within their own apps.

Gemalto is also providing the security framework for the mobile wallet offering from Isis, the mobile payments venture formed by AT&T Mobility, T-Mobile USA and Verizon Wireless.

This movement on mobile payments should come as no surprise. A recent Javelin Report predicted that the total amount of mobile payments at the point of sale would increase from $398 million in 2012 to $5.4 billion in 2018. While the number of mobile payments initiatives announced seems to grow by the week, the next few years should see a shakeout in this market, as clear winners and losers emerge.

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as ...