A major enterprise software company and a mobile-technology provider late on Thursday announced an agreement to develop a service they say will provide a universal connection to mobile wallets and “simplify mobile payments for anyone with a phone.”
The proposed service will combine application programming interface technology from software vendor Samsung SDS America Inc. with a blockchain from mobile-systems vendor Syniverse Technologies LLC to allow, in the words of the two companies, “any mobile user to send money, loyalty points, or other digital currencies to other mobile users or merchants on a global basis.” The companies said the system will work with any mobile operator, though they did not project how long it will take to have a commercial product ready for market.
The initial reaction from at least some experts is positive. “If this platform works as promised it could make a significant contribution to the vision of universal payment acceptance,” says Thad Peterson, a senior analyst at the Boston-based consultancy Aite Group, in an email message. He adds that the absence of interoperability between digital-wallet platforms has been “one of the challenges” holding back what he calls “universal payment acceptance.”
The joint announcement came during the annual Consumer Electronics Show in Las Vegas and stems from a memorandum of understanding signed by both companies. The common platform will be designed to work with any mobile wallet, the companies said, and is aimed at mobile operators as well as players in the retail, logistics, financial, travel, hospitality, media, and entertainment industries. “We’re focused on reducing the friction of cross-regional mobile payments and addressing ever-increasing regulatory requirements by leveraging blockchain technologies,” said Dean Douglas, president and chief executive of Tampa, Fla.-based Syniverse, in a statement.
The new platform will rely on the Universal Commerce blockchain from Syniverse as well as Ridgefield, N.J.-based Samsung SDS’s Nexledger Universal API, which is designed to link to a variety of blockchains, including Ethereum, Hyperledger Fabric, and Samsung’s Nexledger Consensus Algorithm.
Though aimed at mobile operators and enterprise clients, the common platform is intended to enable interoperability for mobile transactions initiated by individual users. The companies said Thursday they worked toward a design in which “your phone number has become your easiest payment method.”
The partners also hope the blockchain-based system will introduce processing efficiencies for mobile payments. “The need for simple, fast, secure, auditable, and cost-effective monetary transactions is growing worldwide. Today the cost to consumers and merchants is too high,” noted Scott Koo, Samsung SDS America’s president, in a statement.
But for all the initial optimism from the partners, it may take quite some time for the common platform to come to fruition, observers say, given its ambitious intentions. “Even if all carriers agree to use this platform, the platform will then need to be expanded to support billing and settlement across a much larger number of entities beyond carriers that trust each other,” says Tim Sloane, vice president of payments innovation at Mercator Advisory Group, a Marlborough, Mass.-based consultancy, in an email message.
“The question will be around the user experience and security,” adds Aite’s Peterson. “The solution can’t create incremental friction if it is to succeed and it needs to be highly secure. It also needs to be able to support volume at scale.”