MasterCard, Deutsche Telekom, Telefonica Deutschland, Vodafone and Trevica are partnering on a mobile payments initiative in Germany, where interoperability issues have long hampered the mobile commerce market.
"We're going to create a single mobile payments platform that we hope will accelerate mobile payments in Germany," says Mario Shiliashki, senior vice president of emerging payments for MasterCard.
The mobile operators will integrate with Trevica, a MasterCard-owned payment processing and technology company. Issuers will be able to connect to all participating mobile operator through Trevica, removing the need to work with each company individually. The German telecoms previously offered a text-based payments service called MPass.
The new German initiative will use Near Field Communication technology to execute wireless payments. This technology is often used in telecom-led mobile wallet initiatives in markets as varied as the U.S., Spain, Australia, the Netherlands, Norway, Canada, France, Italy, Thailand and Taiwan.
Shiliashki would not say which markets Trevica will target next with its mobile wallet model. "We'll roll out in markets where it makes sense," he says.
Mobile contactless payments have faced headwinds in Germany, though there are companies building systems. Deutsche Telekom was already working with MasterCard on an NFC program, and Vodafone works with Visa on a separate mobile payments initiative in Germany.
Germany also has it-werke's GO4Q, a mobile wallet that relies on bar codes to execute payments. GO4Q mostly works with bars, restaurants, golf courses and car services. In an interview last year, it-werke CEO Ulrich Kipper bemoaned the lack of technology interoperability for mobile payments in Germany.
The new MasterCard initiative involves mobile operators whose audiences cover 80% of the German mobile phone market. Thorough this scale, "banks can speed the development of mobile payments," Shiliashki says.
The German initiative follows other major mobile payment initiatives that relied on the reach of the major mobile carriers for scale, including Isis, a U.S.-based mobile payments initiative; and Weve, a British telecom-led venture.
"There is definitely a sense of deja vu here," says James Wester, a research director at IDC Financial Insights. "Some, like Isis and Weve have 'worked,' at least in the sense that they are still around. Others have fallen apart, like the Dutch 'six pack' that involved banks and carriers and fell apart in 2012." MasterCard, Dutch wireless carrier KPN, ABN Amro, Rabobank and ING are now trying to revive the Dutch NFC payments initiative.
MasterCard's German venture is similar to Weve, Wester says. Vodafone U.K., Everything Everywhere and Telefonica's O2 U.K. division are building the Weve mobile payment system on top of the country's current payment infrastructure.
"There's simply a single point of contact between financial institutions and carriers," Wester says.
These ventures are designed to minimize communication issues between financial institutions and wireless carriers, which both operate in heavily-regulated industries and often don't trust each other, Wester says.
"An entity in the middle could conceivably make the connections easier and allow both sides to get what they want," he says. "MasterCard obviously sees itself at least facilitating that connection. It will be interesting to see if they can make this work. From the outside it seems like a blueprint for how to connect mobile and financial services, having a go-between doesn't mean the challenges go away."