Feature Article

July 03, 2012

Deutsche Telekom Launching Mobile Payment System

Deutsche Telekom is in discussions with Google, credit-card networks and banks about becoming partners with its new mobile payment system.

Deutsche Telekom already had said it is working with MasterCard in Europe, allowing the Deutsche Telekom mobile payment system to use point of sale terminals accepting Mastercard payments.

So far, the talks are exploratory. “We’re talking to other players in the market, and even a cooperation with Google is theoretically possible,” said Thomas Kiessling, Deutsche Telekom chief product and innovation officer. 

In principle, Google could supply credentials and loyalty features, as Google Wallet already works with Mastercard payment terminals and systems. 

But Google’s current relationship to telco-owned mobile wallet or mobile payment systems is complicated. In the U.S. market, Google Wallet faces Isis, the consortium owned by AT&T, Verizon Wireless and T-Mobile USA, as a competitor.

In the United Kingdom, Google and PayPal both have warned that a proposed joint venture between Britain’s five biggest mobile service providers could stifle growth of the nascent market, the Financial Times reports.

The “Project Oscar” mobile payments initiative involves Vodafone, Telefónica’s O2 and Everything Everywhere, the merged U.K. businesses of Deutsche Telekom and France Télécom. 

On the other hand, Google obviously is interested in mobile partners, as it has been working with Sprint as part of its U.S. Google Wallet operations.

Separately, China Telecom also has announced a new mobile banking service more oriented towards mobile bill payment and money transfers, rather than retail payments. 

Deutsche Telekom aims to make mobile payments a reality for Deutsche Telekom’s 93 million mobile customers across Europe, beginning in Poland in 2012. 

In Germany, Deutsche Telekom will conduct trials using tags and cards rather than NFC-capable (near field communications) devices, a simple solution to the relative lack of NFC devices in the installed base. 

Deutsche Telekom will issue the MasterCard products via its subsidiary company ClickandBuy, which has the mandatory “e-money license” required to operate a mobile payment system.

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Edited by Brooke Neuman

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