Major interest groups representing mobile network operators and European banks have signed an agreement to discuss informal rules and standards for the rollout of mobile payment in NFC phones. The GSM Association and the European Payments Council signed the agreement Monday, declaring their intention to cooperate on setting guidelines for how telcos and banks will load and manage payment applications on the contactless mobile phones. As first reported by CardLine Global's sister publication Cards&Payments earlier this year, the EPC, which represents 8,000 banks in Europe, wants a stronger voice in how Europe uses mobile payment. While delayed in reaching the market, NFC phones and other devices are expected to begin rolling out by late 2009. The technology will enable consumers to tap their phones to make retail purchases, as well as pay transit fares and use other applications. The GSM Association, which represents more than 750 mobile operators worldwide, has taken the lead in standardizing NFC phones for mobile payment and ticketing. The association has pushed through the concept of using telco-owned SIM cards to store the payment applications in mobile networks in Europe and elsewhere that comply with GSM, the dominant cellular technology worldwide. "Consumers must be able to switch handsets or mobile operators and still keep the payment applications," Dag-Inge Flatraaker, chairman of the EPC's m-channel committee and general manger for group payments strategy for large Norwegian bank DnB NOR, tells Cards&Payments. "What we need first is portability." As part of the accords, the European banks will gain more influence over how security will be handled for their credit, debit and prepaid applications loaded onto SIM cards. They will also get a larger say in general in options for how trusted service managers will operate. Those companies or organizations will be responsible for loading and managing the payment applications on the phones and, in some cases, will serve as the commercial liaison between the banks and telcos. The cooperation agreement between the GSM Association and EPC should yield the first guidelines on m-payment in six months, says an association spokesperson. The association yesterday also announced it would release preliminary minimum technology requirements for NFC mobile phones later this summer that telcos can use to order the handsets. These requirements will include use of the SIM to securely store payment and ticketing applications.

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