BOSTON (AP) ” Shares of credit card networks rallied on Tuesday after Google Inc. announced an expansion of its Wallet mobile payments system.
Google said after markets closed Monday that it was adding Visa, American Express and Discover to its payment system, which aims to make cellphones the next credit cards.
Google said it has licensed the right to add virtual “cards” from the three payment networks to Wallet. MasterCard Inc. is already part of the project.
With a card in the virtual Wallet, owners can pay for merchandise by tapping their phones on wireless-capable payment terminals, instead of swiping a credit card.
Sanjay Sakhrani, an analyst with Keefe, Bruyette Woods, said in a research note that Google’s deal with Visa “paves the way for global Visa-issuing banks to add their credit, debit and prepaid accounts to Google Wallet.”
Sakhrani, who follows Visa Inc., said the movement to phone-based payments is on “a steady course to achieve implementation,” provided more phones and phone companies use compatible systems, and more merchants accept the payments.
Sakhrani said in a phone interview that Google’s announcement indicates the search engine leader is working with card networks to advance mobile payments, rather than trying to compete with them.
“It seems like Google is willing to partner with them, and realizes the networks are the most effective way to process transactions,” he said.
Google is already working with all major smartphone makers whose products run its Android software to incorporate chips that communicate with payment terminals. Visa plans to bring out its own, competing mobile wallet application.
Shares of Visa rose $2.67, or 3 percent, to $92.70 in afternoon trading, while shares of MasterCard Inc. gained $11.62, or 3.3 percent, to $359.60. Discover Financial Services rose 74 cents, or 2.8 percent, to $27.01, and American Express Co. added $1.10, or 2.3 percent, to $49.78.
|
||||||
