American Express’ Serve (s axp) digital wallet is on a roll lining up carrier partners, first Sprint (s s) and now Verizon Wireless (s vz). Verizon announced on Monday that it will support Serve payments on many Verizon smartphones and tablets in the coming months, allowing people to pay for online and offline goods by just entering their phone number.
The deal builds off a previous announcement that Verizon would enable payments through Payfone, a carrier billing service that allows consumers to charge their purchases to their cell phone. American Express earlier announced plans to integrate Payfone with Serve, and now we’re seeing it all come together in the Verizon deal.
This is really just a partnership announcement for now, with many details to come. We don’t know exactly how many merchants will accept Serve payments. And it’s unclear what devices will ultimately support Serve payments. But it shows that Serve is preparing to be a big player that can take on PayPal for online and eventually more offline payments. Serve lets people fund a separate account with credit cards (American Express and others) and through bank accounts. Users can pay for things online with merchants who take American Express, and they can also use a prepaid card to pay for offline purchases.
American Express lined up a deal with Sprint last month enabling Sprint Zone customers using certain Android phones to use Serve’s digital wallet for payments. That announcement was light on some details as well, but it also emphasized that Serve will be not only a payment platform but a tool for delivering and redeeming offers and coupons. That’s going to be the big play, something that American Express is going after with its recent partnerships with Facebook, Foursquare and SCVNGR. It’s not quite clear at this point how Serve ties together with those partnerships built off American Express’ Smart Offers API. But I would imagine there will be some integration at some point. And it again shows that the 162-year-old company is moving quickly to capitalize on the local offers and deals opportunity that Groupon and others have popularized.
The latest news with Verizon again highlights the work of Payfone, which is quietly picking up steam as a payments platform. It has lined up some big-time investments and is now in the process of rolling out partner announcements that show its momentum. Verizon, Research In Motion, Rogers Communication and American Express are among the investors in Payfone, which does some nifty work tapping the SS7 signaling layer that cell phone carriers use to communicate between networks to offer secure payment authentication and one-click payments.
For Verizon, it shows that it’s not just putting its eggs in the Isis basket. While the Isis near-field communications joint venture won’t appear until next year, Verizon is working to enable other forms of payments. It’s not a bad idea, because NFC will take awhile to pick up momentum with consumers and merchants.
Serve is still quite young, but American Express is working to make it a viable contender in the mobile payments space. It’s a reminder that the mobile payments market will be crowded with big players like PayPal,(s ebay) Google,(s goog) the credit card companies and the carriers competing with startups like Square and others. This is going to be a fun and potentially confusing battle to watch over the next few years.