By entering a partnership to develop new mobile money platforms with global wireless carrier Telef-nica, Monitise Plc is expanding the reach of its mobile payments and banking technology beyond financial institutions and traditional payments companies.

The multi-year contract establishes Monitise as Telef-nica Digital's preferred partner in mobile payment and commerce projects, starting in the U.K. and eventually moving into other countries that Telef-nica serves.

“This partnership really works for both companies because they get to test new segments,” says Matt Simester, a London-based consultant with Auriemma Consulting Group and managing director of its Payments Insights. “Telef-nica has the confidence to move toward mobile banking and Monitise, likewise, moves into the retail segment.”

Telef-nica Digital is the London-based digital technology and innovation unit of the wireless carrier Telef-nica, and conducts research and development projects, makes venture capital investments and secures partnerships with various emerging technology developers.

Telef-nica, based in Spain, has 241 million mobile phone subscribers and 316 million total subscribers, with a significant presence in Latin America. In May, it announced a partnership with CaixaBank and Santander to develop a digital wallet and person-to-person mobile payments technology with the Spanish banking giants.

Because consumers in the U.K. have no brand recognition of either Monitise or Telef-nica — which operates as O2 in the U.K. — the companies will have to develop products that O2 users consider “unique and relevant,” Simester says.

“There is no doubt that the mobile technology these two companies develop will work, but what is the consumer value proposition going to be?” Simester asks.

Strategically, the partnership makes sense because it illustrates that a large company like Telef-nica sees the value in “having a smaller, nimble company like Monitise” provide the mobile platforms, Simester says.

Monitise calls the agreement a “milestone,” one which Monitise Group CEO Alastair Lukies says confirms the company’s role in the mobile money marketplace.

“Successful mobile commerce, whether local in-market solutions or global services, is ultimately about collaboration,” Lukies says in a July 1 press release.

“Partnerships like this show how we are at the heart of the accelerating convergence via mobile between the offline and digital worlds of banking, payments and commerce,” Lukies adds.

The partnership with Telef-nica comes nearly four months after Monitise agreed to a new three-year deal with Visa Europe to further develop mobile payment and commerce for Europe’s top banks.

The deals with Telef-nica and Visa Europe follow a strategy that Monitise began developing in December of 2012 when it built a relationship with Intuit Inc. and its banking customers to potentially reach the merchant customers that use the GoPayment card reader.

Monitise has been investing in its Buy Anything mobile commerce initiative for more than a year, says Zil Bareisis, a London-based senior analyst for research firm Celent.

“Investors are always happy to hear announcements of new customers, which might explain the stock market reaction,” Bareisis says, referring to a 4% jump in Monitise stock the day after the Telef-nica announcement.

The partnership also “reflects the increasing importance of other players, such as mobile network operators, retailers and others in the mobile commerce world,” Bareisis adds.

The next 12 months in the UK should be interesting for consumers and retailers, considering the progress of the Weve mobile commerce initiative, and the launch of Zapp from Vocalink, in addition to the Monitise and Telef-nica deal, Bareisis says.

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