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Mobile payments technology vendor gets $19 million in funding
Payfone enables consumers to pay for goods using their phone numbers.
Managing Editor, Mobile Commerce
A group of investors that includes some big names is betting on the future of mobile payments by investing in Payfone Inc. American Express led the $19 million funding round for the mobile payments technology provider. Other investors include Verizon Investments Inc., BlackBerry Partners Fund, Rogers Ventures, Opus Capital and RRE Ventures. Payfone says it will use the new funds to expand its business throughout North America, Europe, the Middle East, Africa, Latin America and Asia.
BlackBerry Partners Fund, Opus Capital and RRE Ventures invested $11 million in Payfone last August.
“The payments industry is going through a fundamental transformation, with the move to digital payments becoming the primary driver,” says Dan Schulman, group president, enterprise growth, at American Express. “Payfone is well positioned to lead the next wave of innovation in mobile payments and commerce and we look forward to working with the Payfone leadership team to evolve Serve, our new digital payments platform, to provide the most flexible and secure payment solutions for buyers and sellers.”
The Payfone system uses a consumer’s phone number as the payment identifier. A consumer registers her phone number with Payfone and Payfone links her number with the SIM (subscriber identity module) card in her phone so that the number can only be used to make purchases from that phone. Payfone stores a consumer’s wireless carrier account, credit or debit card, or American Express Serve account information. Consumers can charge purchases to any of these payment vehicles. Serve is a mobile wallet app and card that enables mobile payments.
Participating merchants integrate Payfone functionality into their web and mobile web sites and mobile apps and display a Pay with Payfone icon at checkout. A consumer taps the icon, enters her phone number and the purchase is completed. Payfone uses Signaling System No. 7, or SS7, telephone signaling protocols to connect via the Internet directly with carriers and card processors for payment authorization.
Payfone says numerous merchants have been testing the system and it will announce the names of the merchants in the near future.