Citi Makes a Down Payment on M-Payments with ViVOtech Stake

Getting financial institutions and telecommunications providers to agree on major issues related to mobile payments is one of the most difficult problems faced by the nascent mobile-payments industry. Nonetheless, some banks want to plant a stake on the mobile-payments turf early, as evidenced by the announcement this week that Citigroup Inc. had made an equity investment in ViVOtech Inc., a Santa Clara, Calif.-based supplier of mobile-payment terminals and software based on near-field communications (NFC) contactless technology. A ViVOtech spokesperson says the investment was “several million dollars,” but neither company would be more specific. Nor would they say exactly what Citi has planned with ViVOtech. But ViVOtech president and founder Mohammad Khan tells Digital Transactions News that the two companies will unveil a project “in a very large country” outside of North America in about two months. Khan says that in mobile payments, Citi could find new ways to develop transaction volume and deepen its relationships with its huge cardholder base. “Their trust in mobile payments continues to grow,” he says. In an e-mail to Digital Transactions News, Jaidev Shergill, Citi's executive vice president of growth ventures and innovation, says to “stay tuned” about coming ventures. “Citi and ViVOtech have been working together globally to deliver integrated and secure mobile capabilities, and we are developing opportunities in markets across the world,” he says. ViVOtech has operations in 29 countries, according to Khan. Citi joins a group of ViVOtech investors that includes diverse players ranging from NCR Corp. to Nokia and Motorola Inc. to processor First Data Corp., as well as venture-capital firms. “Our investment in ViVOtech demonstrates our commitment to leverage emerging technology and opportunities to offer our customers greater speed, simplicity, convenience, and security,” says Shergill. “Furthermore, ViVOtech has the advantage of being a relatively early entrant into this space and therefore has the advantage of a high level of technical and business maturity in working within this evolving space. Additionally, by participating, both in the software and hardware side of this business, they have the advantage of providing a more seamless solution. This is attractive to us.” Khan says the recently announced pilot of NFC payments in San Francisco involving the Bay Area Rapid Transit District (BART), the Jack in the Box Inc. fast-food chain, telecom Sprint Nextel Corp. and First Data is going well, but he wouldn't give details (Digital Transactions News, Jan. 28). In that trial, 230 users can hold their Samsung mobile phones, specially equipped with NFC chips, up to some Jack in the Box and Sprint “smart advertisements” on BART station walls and download either directions to five NFC-enabled Jack in the Box restaurants or content from Sprint. At the Jack in the Box locations, participants can use their phone to pay for their meal. Their phones come with $48 in preloaded value for use on the BART system?riders can tap 500 turnstiles in 48 stations. Users also can download over the air $48 worth of rides for $45.