Pair to create NFC-based mobile payment system for Deutsche Telekom's 93 million customers across Europe
MasterCard and Deutsche Telekom have announced a European mobile payment partnership. Deutsche Telekom's 93 million mobile customers across Europe will be able to use their mobile phones as a way to pay for products and services using near field communication (NFC) tags and on the SIM.
The initial consumer roll out will take place in Poland later this year, while German consumers will simultaneously also be introduced to mobile payments, initially in a trial with mobile phone tags and cards. The German roll out will evolve into a mobile wallet service that will also be open to other issuing banks and partners. That will occur during the first half of 2013.
Deutsche Telekom will issue the MasterCard products via its subsidiary company ClickandBuy, the owner of an e-money licence. Products will also be launched in other European markets.
However, Angel Dobardziev and Eden Zoller, analysts at Ovum, warned: 'Deutsche Telekom's strategy is very broad and may be challenging to execute well in so many different areas and across the different geographies that Deutsche Telekom operates in. Deutsche Telekom is also facing increased competition from a growing number of players with similar mobile payment propositions, including Google that, like Deutsche Telekom, aims to differentiate with an integrated online and mobile payments service.
'We also see challenges with Deutsche Telekom's business model, which is based on a share of transactions and rental fees; we expect this to be tested by alternative models based on advertising with free services to consumers and merchants.'
Dobardziev and Zoller commented on the enterprise: 'The drive behind Deutsche Telekom's mobile payments strategy is to create a comprehensive framework that will address many of the challenges in what is currently an incomplete ecosystem. This is a commendable goal. Deutsche Telekom is working to ready the market and strengthen its brand association with financial services by becoming a credit card issuer for MasterCard. Deutsche Telekom is looking to improve the retail infrastructure for mobile payments by acting as a sales partner for NFC-enabled point of sale terminals. It is providing NFC tags for consumers that do not have NFC enabled devices. Deutsche Telekom is taking a considered, phased approach to service roll out, which is no bad thing, starting in Poland this year and Germany in 2013.'
