American Express Co., the bank-card network fighting for a share of the mobile-payments market, reached a deal that will allow customers of car-service firm Uber Technologies Inc. to book rides using rewards points.
The technology will be integrated into Uber’s mobile phone app starting today, AmEx President Ed Gilligan said in a telephone interview. American Express card holders spent “hundreds of millions of dollars” last year on Uber rides, he said.
AmEx, along with rivals Visa Inc. and MasterCard Inc., is developing technologies and striking deals with merchants as more transactions shift from cash and plastic to mobile phones. U.S. mobile payments could more than quadruple to about $90 billion by 2017, according to a report last year from Forrester Research Inc.
“I am not happy until 100 percent of Uber users are using AmEx to get around their city,” said Uber Chief Executive Officer Travis Kalanick, adding he sees an “affinity” between his San Francisco-based company and American Express. “There’s still a decent way to go, but a very large percentage of our customers are already AmEx card members.”
Under the deal, customers of New York-based AmEx can redeem or earn double rewards points with each ride. The company also has worked with firms including Twitter Inc. and TripAdvisor Inc. to make it easier for customers to use mobile payments to shop online.
Banks and card networks are facing competition from Merchant Customer Exchange, a retail industry group whose members include Wal-Mart Stores Inc. and Target Corp. and is seeking to create its own mobile-commerce system. Technology firms such as Apple Inc. and EBay Inc.’s PayPal are also said to be exploring their own mobile-payment networks.
“Cards could go away, that’s the fundamental threat with mobile,” said Nick Holland, senior payments analyst at Pleasanton, California-based Javelin Strategy & Research. The networks are still “in a good position,” he said. “They’ve been very tactical, there’s a lot of tactical acquisitions and partnerships going on.”
Visa and MasterCard, the world’s biggest networks, are working on technologies to enable mobile payments including so- called near-field communications, which they say allow phones to transfer data by bringing them in close contact. The firms are also pushing adoption of EMV-chips, which they say will help make such payments more secure.
“Everything that’s being done is being done to make it easier to use your mobile device or any digital form to purchase,” Visa CEO Charlie Scharf said in a May 19 conference call, adding that plastic cards will eventually disappear.