Isis Backer Verizon Wireless Agrees to Add AmEx’s Serve to Phones And Tablets

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American Express Co. on Monday added to the bragging rights of its new Serve online and mobile payments unit by announcing that Verizon Wireless, the nation’s leading wireless carrier, would integrate Serve into an undisclosed number of mobile phones and tablet computers. The announcement came less than three weeks after AmEx booked Sprint Nextel Corp. as Serve’s first mobile-carrier partner.

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AmEx and Verizon Wireless, a unit of New York City-based Verizon Communications Inc. with nearly 100 million customers, gave few specifics about how they would work together. In a release, the companies said that in the coming months Verizon Wireless customers would be able to open Serve accounts to make online payments and redeem offers for goods and services directly from their mobile phones and tablets. Redemptions could automatically appear as credits in the customers’ Serve accounts.

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The announcement also was notable because Verizon Wireless is one of the three carriers that own the Isis mobile-payments joint venture. The other two are AT&T Inc. and T-Mobile USA. A Verizon Wireless spokesperson tells Digital Transactions News that Serve and Isis won’t conflict. “The Serve thing would be for online purchases,” he says. “We have other partners in the mobile-commerce space, Isis being front and center, that we expect will play in that space.”

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George Peabody, director of the Emerging Technologies Advisory Service at Mercator Advisory Group Inc., says he is not surprised that Verizon Wireless would guard other payment systems from moving onto the POS turf of Isis, which will enable contactless payments and rewards redemptions in stores using near-field communication (NFC) technology. “That’s the big, fat part of the business,” he says. Serve currently facilitates POS payments through a reloadable prepaid card accepted at any U.S. merchant that takes AmEx. The card can be funded from any major credit card, not just AmEx.

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Peabody also says he wouldn’t be surprised if Serve continues adding carriers, also known as mobile network operators. “It’s a pretty low-friction decision for the carriers to sign up with this,” he says “From an infrastructure point of view, there is not a lot the MNOs have to do.”

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The Verizon Wireless spokesperson refuses to say how AmEx and the carrier would split revenues from Serve transactions. An AmEx spokesperson couldn’t be reached Monday afternoon.

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Monday’s deal marks the second time in recent months that AmEx and a Verizon affiliate have joined forces to spur mobile payments. Verizon Wireless and AmEx said they are working with Payfone Inc. to support Serve checkout on Verizon Wireless devices. New York City-based Payfone uses a consumer’s mobile-phone number to authorize purchases. AmEx led a $19 million investment in Payfone in April that included the investment arm of Verizon Communications, BlackBerry maker Research in Motion Ltd., Canadian media and telecommunications company Rogers Communications, and two other investment firms. “Payfone’s pre-authorization and intelligent-routing features will help Verizon Wireless customers who use the Serve application make mobile payments simply and securely,” the release says.

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While various mobile devices sold at Verizon Wireless stores will come preloaded with Serve capability, the Verizon Wireless spokesperson notes that customers with other devices will be able to download the Serve application.