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In a move that could bring mobile payments based on near-field communication (NFC) to a wide array of financial institutions, MasterCard Inc. on Thursday announced it will provide its PayPass contactless-payment technology to mFoundry Inc., a Larkspur, Calif.-based vendor of mobile-banking software. MasterCard also invested an undisclosed sum in mFoundry, the first time in memory the payments network has infused capital in a venture-backed company. Among mFoundry’s current investors are PayPal Inc. and NCR Corp.

Still, some observers aren’t so sure the MasterCard-mFoundry strategy will succeed. Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group LLC, says banks can’t afford to place all their bets on mobile banking to spark mobile payments. “Ultimately, banks can’t win alone,” he says. “Somebody has to control that [NFC] chip on the phone, and banks aren’t in the right position to do that. You need Google or Apple or you need the [wirelesss] carriers.” Google Inc.’s NFC-based mobile wallet went live in September. Isis, a joint venture backed by the nation’s largest carriers, expects to introduce its NFC product next year. Apple Inc. has been widely rumored to be working on an NFC solution, but the notoriously tightlipped company has not disclosed any plans.

Digital Transaction, December 1, 2011