U.S.-based Mozido, a supplier of cloud-based, white-label mobile payments and commerce products, upped its stake in NFC technology, making a $2.5 million investment in host-card emulation start-up SimplyTapp.

Mozido, which in December acquired U.S.-based mobile-wallet provider and trusted service manager SK C&C USA, known as CorFire, for an undisclosed amount is expected to use SimplyTapp’s HCE technology to add to its offer for customers, such as merchants. The retailers for example, could introduce HCE-based private-label payments and nonpayments applications. 

CorFire, which developed the well-received non-NFC mobile wallet technology for quick-serve chain Dunkin’ Donuts in the U.S., is also providing a TSM services, including a platform for U.S. mobile carrier AT&T for non-payments NFC applications and an SP-TSM platform under license for a co-branded payment service launched by one or more Vodafone branch operators in Europe. CorFire, along with First Data also provided the TSM for the initial version of Google Wallet when it launched in September of 2011. 

On the whole, mobile-wallet and TSM vendors have struggled because of the delayed take-up of mobile payments. In particular, the TSM business role is under threat from such alternatives as host-card emulation and competitors such as Apple, which is serving as its own TSM for Apple Pay, with help from the major payment schemes. 

TSMs, which provision applications on secure elements in NFC phones or manage the keys for the secure elements themselves, have failed to live up to the high expectations backers once had for the technology. And most TSMs are believed to be offering HCE and tokenization, or plan to do so, though few are publicizing that fact. 

SimplyTapp, founded in 2011, is one of the earliest developers of HCE technology and is believed to have worked on the Royal Bank of Canada cloud-based payments project. 

The start-up said in an announcement today it would use the $2.5 million from Mozido to “ramp up R&D by expanding its core engineering team and bolster channel support for global partners.” 

SimplyTapp’s competitors in the U.S. include Bell ID and Sequent Software, both of which also have TSMs or TSM software; as well as Carta Worldwide. 

SimplyTapp in announcing the Mozido investment seemed to emphasize enabling merchant-issued payments through what it bills as its “open-card issuance platform,” which it says “allows merchants to use Near Field Communication for cheaper payments because there are no interchange fees, with the same user experience as the recently launched Apple Pay. 

“Merchants can securely and effectively leverage mobile payments within their customer's mobile experience, including stored-value and private-label cards, with a single tap at existing NFC payment terminals,” said the statement.

The investment is part of SimplyTapp’s series B funding round, which stands at $8.5 million, CEO Doug Yeager told NFC Times. The financing round includes funding from existing investors Blue Sky Capital and Lightspeed Venture, among others. SimplyTapp’s announcement today indicates the start-up’s total funding is $10.1 million. 

In announcing its acquisition of CorFire last month, Mozido’s Michael Liberty, founder and head of global strategic initiatives at the well-funded Austin-based company, said in a statement that Mozido would add CorFire’s “strength in NFC-enabled mobile wallets” to its own “extensive mobile-financial services and retail marketing capabilities. 

“We can now give merchants around the world access to a powerful mobile ecosystem that adds monetization features to mobile programs,” he said. 

Mozido last month announced a “partnership” with MasterCard Worldwide, an investor, to support MasterCard credit, debit, and prepaid cards as mobile wallet funding sources. Mozido said it would integrate MasterCard products for its mobile-payments and commerce offers, including MasterPass, HomeSend, MoneySend and rePower, along with other MasterCard security and commerce services.

Mozido declined to disclose the price it paid for the majority stake in CorFire. In October, the company announced that it had raised $185 million in series B funding from investors including MasterCard, Wellington Management, Sheikh Nahyan of the United Arab Emirates and Tiger Management CEO Julian H. Robertson, Jr. This brought the company’s 12-month total investment capital to $265 million, said Mozido, which was founded nearly 10 years ago. Mozido said it plans to raise a total of $400 million in Series B funding.

In a statement, Mozido had said that it planned to use the capital for “strategic acquisitions to accelerate the growth of Mozido’s ecosystems of financial, payment and marketing mobile services around the world.” CorFire appears to be one such acquisition and the investment in SimplyTapp another.

South Korea-based SK C&C remains an investor in CorFire, following the acquisition, Mozido said. 

© NFC Times and Forthwrite Media. NFC Times content is for individual use and cannot be copied or distributed without the express permission of the publisher.