SK C&C USA, InComm Will Let Merchants Offer Mobile Payments

SK C&C USA, a unit of South Korea’s SK C&C, will work with InComm to introduce a technology that helps shoppers get coupons and pay for items on their phones, a bid to take on Google Inc. in the mobile-pay market.

The partnership joins Alpharetta, Georgia-based SK C&C USA with InComm, an Atlanta-based distributor and processor of prepaid cards, said Keith Smith, president of CorFire, the mobile-commerce business of SK C&C USA. InComm has operations in 225,000 stores, including Wal-Mart Stores Inc. and Best Buy Co.

The partners’ technology will let merchants issue mobile wallet applications, containing prepaid, gift and bank cards and coupons, under the retailers’ own brands. Customers will download the apps from the Web or from Internet app stores to their smartphones, and use them to pay at cash registers.

The merchants’ mobile-payment and coupon services will compete with similar products from Google and ISIS, a joint venture between AT&T Inc., Verizon Wireless and T-Mobile USA. Google’s and ISIS’s mobile wallets will contain loyalty cards from merchants that feature the ventures’ brands -- rather than the retailers’ -- and control how and when customers receive merchant offers.

“If merchants don’t develop their own wallet, they’ll always be beholden to Google to reach their customers,” Richard Crone, who heads Crone Consulting LLC, said in an interview. While small retailers may go with Google or another third-party provider, large merchants will issue their own wallets as well, he said.

Forgotten Merchant

“We’ve come forward and said, ‘Someone’s forgotten about the merchant,’” Smith, CorFire’s president, said in a telephone interview. SK C&C USA’s technology is already used in the Google wallet and to provide mobile-payment services to about 25 million mobile subscribers in Korea.

Merchants who issue their own mobile-payment products will also be competing with wallet apps provided by banks, credit card companies and even carriers. A typical consumer’s phone is likely to carry multiple mobile wallets. Wallet issuers will compete for their app to be the most used.

“Clearly, these wallets are encroaching on each other’s territory,” Nick Holland, a senior analyst with consulting firm Yankee Group in Boston, said in an interview. “Whoever telegraphs to consumers that they have the most robust experience wins.”

SK C&C USA and InComm have added features to their wallet to make it more appealing, said Dustin Young, vice president of product strategy for InComm. Merchants will be able to tailor a coupon or an offer to individual consumers.

Custom Products

Each merchant will also be able to customize the wallet to emphasize loyalty or gift cards, or daily deals. A merchant can also choose to let a consumer pay and redeem coupons by scanning bar codes or by tapping their phones on cash registers enabled for a technology called near field communication. Those registers can accept payment from NFC-enabled phones like the Google Nexus S.

“We believe that consumers will gravitate toward merchants’ wallets because they will offer value above and beyond what others offer,” Young said in an interview.

Adoption by large nationwide merchants will be key to the partners’ success. The first merchant wallets based on their technology should be announced in the fourth quarter, Young said.

“We are in conversations with several major retailers in the country,” Smith said.

ISIS plans to launch its wallet in two cities in early 2012, according to a statement. Google’s wallet will become available in San Francisco and New York this summer.

While the partners didn’t disclose what fees they will charge the merchants for their technology, it will be “more cost effective” than what merchants use today, Young said.

“We are not looking to add cost to the system,” Young said.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE