TSYS Joins Rivals First Data, Metavante in Mobile Banking And Payments

With its announcement on Thursday that it is working with a U.K. provider to enable mobile access to credit card accounts in the U.S., Total System Services Inc. (TSYS) has joined rival payments processors First Data Corp. and Metavante Corp. in entering the nascent but highly promising business of mobile banking and payments. TSYS, which processes credit card accounts for about 100 financial institutions in North America, says it has begun marketing to those clients a service from Telrock PLC that will allow cardholders to use their mobile phones to get fraud alerts and other messages, make inquiries, and pay their credit card bills. The new service, which follows a similar arrangement TSYS has had for a year with Telrock in Europe, depends on short-message-service (SMS) transmissions. Through the service, cardholders will be able to receive text messages alerting them to activity on their accounts, payments due, and possible fraud. A TSYS spokesman says the processor is offering the service to prospective clients as well, since it expects mobile account access to be quite popular. “Nearly all of our clients have been asking about mobile functionality,” he says in an e-mail message to Digital Transactions News. The TSYS foray into mobile services comes just a month after the company's biggest competitor, First Data Corp., formed a new unit to help the Denver-based processing giant take advantage of emerging opportunities in mobile payments. Formation of the unit came after the company had treated mobile payments with an incubator approach, says Barry McCarthy, president of First Data Mobile Solutions. “We had formed a center of excellence to look at mobile commerce, but we quickly realized there was so much opportunity so we decided to form a P&L business unit,” he says. The new unit's first announced project is a trial of payments using near-field-communication technology in San Francisco. Riders on the Bay Area Rapid Transit system can use mobile phones fitted with NFC chips to access prepaid accounts to pay their fares and buy food from local Jack in the Box restaurants (Digital Transactions News, Jan. 30). The pilot, which also involves the Sprint network, stands out as the first major NFC test in the U.S. involving both a merchant and a transit agency. It is also the first major NFC pilot not sponsored by Visa Inc., MasterCard Worldwide, or Discover Financial Services Inc. McCarthy says proprietary research First Data has conducted with “several thousand” consumers indicates NFC will be very popular with users. “We think it's much closer and will be much more rapid in its adoption than many pundits think,” he says. A two-way, very short-range technology, NFC allows consumers to use their handsets as contactless payment instruments at the point of sale and as access devices to virtual wallets that can hold coupons and other media as well as payment accounts. Though the technology shows much promise, its progress has been slowed by wrangling between the bank card networks and the mobile operators over business and security issues. McCarthy, however, hints says his new division will be launching more projects this year, though he won't be specific. “You'll be hearing more news from First Data,” he promises. Last year, Milwaukee-based Metavante formed a joint venture with the U.K. mobile services provider Monitise PLC to introduce a mobile-banking service in the U.S. The venture, called Monitise Americas LLC, has signed 20 banks for the service, which works via SMS or a downloaded application. It relies on Metavante's NYCE electronic funds transfer network for direct access to users' accounts. For now, the service is limited to balance inquiries, alerts, and account transfers. This spring, it will begin offering conventional and expedited bill payments through Metavante's bill-payment engine, says Lisa Stanton, Monitise America's chief executive.