Digital Transactions Authoritative, insightful and timely information for payments professionals
Discover Financial Services LLC on Tuesday reported that it would use Motorola Inc.'s M-Wallet technology for a test of contactless payments and account management using cellular phones. The pilot not only represents another step by Discover on its road to network-wide contactless payments, but it's also significant for Motorola, which has gained a major payment-card network as a test venue for M-Wallet. The cell-phone and electronics giant launched the technology last year as a software platform first aimed at telecommunications carriers. The pilot will involve up to 1,000 Discover cardholders and an undisclosed number of merchants, most located near Discover's Riverwoods, Ill., headquarters north of Chicago and processing center in Salt Lake City, Utah. Once downloaded onto the Motorola cell phones that will be used in the test, M-Wallet software will let cardholders make tap-and-go purchases at contactless-enabled merchants without having to pull out their plastic Discover cards. Cardholders also will be able to review payment histories and account balances and receive statements and rewards information. Joby Orlowsky, Discover Network vice president of marketing, tells Digital Transactions News that in testing the Motorola platform, Discover is not forgoing usage of other companies' hardware or electronic-wallet software. “We felt that that for the test we were going to run, that Motorola was the best partner,” he says. “It was a mutually beneficial arrangement.” Discover hopes to get solid information about transaction speed, customer convenience, incremental sales for the merchants, and other factors during the test, which will see considerable activity over the next couple of months but has no definite end date. Orlowsky refuses to identify the merchants, but says a number are quick-service restaurants. For Motorola, the Discover pilot will be a trial run in a payment-network setting of the M-Wallet software, which uses near field communication (NFC) technology for short-range messaging for transmitting transaction data between the cell phone and other device such as a card terminal. The Motorola phones will be supported behind the scenes by the M-Wallet's integration and hosting services. C-Sam Inc., a small Chicago firm, developed the M-Wallet software and licensed it to Motorola (Digital Transactions News, Feb. 9, 2006). A Motorola spokesperson could not be reached immediately for comment. But in a joint news release with Discover, Navin Mehta, vice president of services at Motorola Networks & Enterprise, said, “the Motorola M-Wallet solution creates value for financial institutions and retailers by streamlining electronic transactions and optimizing the customer-management processes.” The Motorola trial is just one more part of Discover's expanding but somewhat mysterious contactless-payments initiative, an effort Discover is revealing in bits and pieces rather than in one grand announcement (Digital Transactions News, Nov. 29, 2006). Discover also announced today that it has certified the MicroPass L4 intelligent hardware platform from France-based chipmaker Inside Contactless. The MicroPass L4 is a microprocessor-based contactless chip platform that can be used with cards, key fobs, and other devices approved for use with Discover Network's contactless system. Press reports from the recent Northeast Acquirers Association winter conference in Mt. Snow, Vt., noted the presence of a booth with the logo of Zip, a heretofore-unknown brand some observers speculate is going to be the name of Discover's contactless network. But Orlowsky's lips are mostly zipped about Zip. “Very factually, we are not in a position to say if we are going to have a contactless brand,” he says.
