AmEx hitches ride in mobile battleComment on this story
New York - American Express, the bank-card network fighting for a share of the mobile-payments market, reached a deal that will allow customers of car-service firm Uber Technologies to book rides using rewards points.
The technology was integrated into Uber’s mobile phone app starting yesterday, AmEx President Ed Gilligan said in an interview. American Express card holders spent “hundreds of millions of dollars” last year on Uber rides, he said.
AmEx, along with rivals Visa and MasterCard, is developing technologies and striking deals with merchants as more transactions shift from cash and plastic to mobile phones.
US mobile payments could more than quadruple to about $90 billion by 2017, according to a report last year from Forrester Research Inc.
“I am not happy until 100 percent of Uber users are using AmEx to get around their city,” said Uber chief executive Travis Kalanick, adding he sees an “affinity” between his firm and New York-based American Express.
“There’s still a decent way to go, but a very large percentage of our customers are already AmEx card members.”
American Express customers can redeem or earn double rewards points with each ride on Uber, the San Francisco-based company that lets people order private town cars and other vehicles from their smartphones and is valued at about $17 billion.
American Express also has worked with firms including Twitter and TripAdvisor to make it easier for customers to use mobile payments to shop online.
Banks and card networks are facing competition from Merchant Customer Exchange, a retail industry group whose members include Wal-Mart Stores and Target and is seeking to create its own mobile-commerce system.
Technology firms such as Apple and EBay’s PayPal are also said to be exploring their own mobile-payment networks.
“Cards could go away, that’s the fundamental threat with mobile,” said Nick Holland, senior payments analyst at Pleasanton, California-based Javelin Strategy & Research.
The networks are still “in a good position,” he said.
“They’ve been very tactical, there’s a lot of tactical acquisitions and partnerships going on.”
Visa and MasterCard, the world’s biggest networks, are working on technologies to enable mobile payments including so-called near-field communications, which allow phones to transfer data by bringing them in close contact.
The firms are also pushing adoption of EMV-chips, which they say will help make such payments more secure.
“Everything that’s being done is being done to make it easier to use your mobile device or any digital form to purchase,” Visa chief executive Charlie Scharf said in a May 19 conference call, adding that plastic cards will eventually disappear. - Bloomberg News