NEW YORK ( TheStreet) -- Citigroup (C) is taking a pass on charging fees tied to the new "mobile wallet" it's building with Google (GOOG) and MasterCard (MA) in order to gain an even more precious commodity that shareholders will appreciate: new customers.
"It should not surprise our shareholders that we want to jump on this capability," says Citigroup's Global Enterprise Payments CEO Paul Galant. "The revenue potential is multi-fold. We expect our consumers will use the Google wallet, enjoy the offers and do more business with Citigroup."
On Thursday Citi, Google and MasterCard announced "Google Wallet" and "Google Offers," a mobile payment system for Android smartphones that will use near-field technology as a way for users to pay for goods and services.
Galant says that Citi customers with Android phones should be able to use the Google wallet after it launches this summer and that he hopes that it will be a jumping off point for other phone providers, banks, merchants and systems to use the technology."No consumers will be charged a fee to use it. We are focusing on consumer adaption. Under no circumstance do we have any interest in charging customers to be involved in this," Galant says. "We expect we will work with other digital networks to enable commerce through these channels and work with other systems and other banks." Citigroup and MasterCard would not say how much revenue they hope to generate through the use of this program. Over a hundred thousand retailers have partnered up with Google, MasterCard and Citigroup to use the technology. Galant adds that the transactions through the program will also be subject to any regulations, including the Durbin Amendment of the Dodd-Frank Wall Street Reform Act. The Durbin Amendment limits the amount of interchange fees banks can charge to merchants. MasterCard and Citigroup have been trialing a so-called "PayPass" near-field payment system with several vendors including the Metropolitan Transit Authority in New York. A spokesperson said that that was a separate program, but essentially the technology works the same, except that the PayPass would be an app inside the phone. Citigroup is one of several banks trying to break into the mobile space. American Express (AXP) and Bank of America (BAC), Wells Fargo (WFC) and JPMorgan Chase (JPM) have all launched a similar programs. The space was largely dominated by PayPal, which brought in $3.4 billion in profit for the company in 2010. The company expects it to grow to $4.2 billion in 2011. --Written by Maria Woehr in New York. Readers Also Like: >> 9 Tips for Protecting Your Online Identity >> 10 Androids That Outmuscle the iPhone
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV