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Austria’s largest mobile operator is also a European pioneer in mobile commerce.

A1, formerly known as mobilkom Austria, was one of the first telcos anywhere to start its own financial institution, A1 Bank, in 2002.

The banking license enables subscribers to pay parking fares, transit tickets and make Internet purchases on computers using their mobile phones and mainly SMS. The charges usually appear on subscribers’ phone bills.

A1, part of the Telekom Austria Group, began enabling subscribers to buy SMS-based transit tickets with their mobile phones in 1999, even before starting the bank. And in 2001, it launched an Austrian branch of German-based mobile payment platform Paybox, which later allowed for interoperable mobile-payment services with other Austrian mobile operators.

In September 2007, mobilkom introduced phones that support NFC, which reduces the steps necessary for subscribers to buy the SMS tickets on Austria’s national railway and Vienna’s metro. It also enables subscribers to tap to buy snacks in vending machines and use other network-based commerce more quickly. The telco even created its own NFC target mark for the services.

The telco heralded the move as the first “rollout” of NFC services and said the ease of use NFC offers has increased m-commerce transactions. But the telco could only offer one handset, the Nokia 6131, to the public. It later added the 3G Nokia 6212 in early 2009. All told, it said it had sold about 40,000 of the NFC phones as of fall 2009, although it probably would have sold as many of these handset models in the non-NFC version.

A1 also launched a small trial putting transit ticketing on the embedded secure chip in the 6212, enabling Austrian national railway conductors to tap the phones to verify the tickets. That was not possible with the SMS-ticketing and enables mobilkom to allow subscribers to download higher-value tickets.

The telco plans to put the ticketing application on SIM cards it issues after NFC phones are available supporting the application. It will also likely put a credit card application on the SIMs, once contactless point-of-sale terminals are available in Austria.

A1 launched a conventional Visa-branded credit card in September 2009, which it later plans to make contactless. It could also move this contactless application to NFC phones.

And in April 2012, A1 announced it planned to roll out its own NFC payment brand, paybox NFC, an effort to expand its paybox online and mobile-parking payment scheme to the physical point of sale. It will face an uphill battle trying to establish the scheme.