Payfone (payfone.com) and American Express recently announced a strategic partnership that will combine Payfone’s mobile payment authorization services with American Express’ digital platform payment system called Serve. The combination will allow customers to make purchases from online retailers using their mobile phone number instead of a credit card. Customers will be able to connect their account to either their mobile phone carrier or their American Express Serve profile.
The partnership comes at a unique time when mobile phones appear to be the future of payment processing. Just a few weeks ago, Google announced their heavy investment into NFC (near-field communication) which allows consumers to swipe a mobile device near a merchant’s POS system instead of swiping a credit or debit card.
Payfone’s competitive advantage lies in their ability to leverage current assets of mobile carriers like the global SS7 signaling network. This allows for direct payment processing and authorization through the carriers. This technology is unique to Payfone and is a driving factor in the decision for American Express to partner with the company over their competitors.
The idea behind the new technology is to give consumers more options when determining their payment method. The first step is adoption with online retailers, but this technology can be expected to expand out quickly to other sectors if it proves to be profitable for both partners. Worldwide, 2 billion people own credit cards while over 5 billion own mobile phones.
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