First Data, Tyfone work on mobile wallet

Tyfone has developed an offering similar to what's known as near field communications that lets users tap their phones against a scanner at a cash register to pay for something. But rather than building the technology into the phone or on the SIM card, Tyfone builds it on a MicroSD card.

That makes it easier to remotely make changes to the card over the air and could make the concept more palatable in the U.S., where MicroSD cards are more universal than SIM cards. People with Tyfone's product can use the MicroSD card to store other data like music, in addition to the mobile payment technology.

The deal means that First Data, which handles transactions, will supply Tyfone's cards and the software platform that helps manage the cards to merchants and financial institutions.

The companies, however, have not announced any deals with critical partners: retailers or banks that have committed to using the cards.

There are a few scenarios in which a retailer could use the cards, said Siva Narendra, chief technology officer of Tyfone. A merchant like Starbucks, for example, could give or sell the cards to customers who would use them like they already use prepaid Starbucks cards. Starbucks, which sells music in addition to coffee, could even preload songs onto the MicroSD card.