Deutsche Telekom Announces NFC Mobile-Wallet Rollouts
BARCELONA – Large mobile operator group Deutsche Telekom today announced plans to roll out NFC services in four of its European markets starting this year, including launching its own mobile-payment service at the retail point of sale in its home base of Germany.
As NFC Times first reported in November, the payment services will be part of a centrally coordinated Mobile Wallet program, to be launched in Germany, Poland, the Netherlands and the Czech Republic.
The launch would include Deutsche Telekom’s own payment service at physical stores, expected to be based on the mpass Web shopping service it operates with two competing operators, Vodafone and Telefónica O2 Germany. It’s not clear yet whether these telcos would be involved in the NFC launch at the physical point of sale, as well.
In other countries, such as Poland and the Netherlands, Deutsche Telekom’s branch operators would work with major banks on NFC mobile payment, Deutsche Telekom told NFC Times.
The telco said today it would launch NFC on the common platform with its flagship carrier in Germany and its branch in Poland, PTC, in 2011. It would introduce NFC in the Netherlands and Czech Republic in 2012.
The telco said launches in other countries would follow. In today's announcement, Deutsche Telekom also mentioned its participation in the Isis joint venture in the Unites States with mobile carriers Verizon and AT&T, which plans to launch its own payment brand and other NFC services in 2012.
Plans call for the Deutsche Telekom mobile wallets to not only include payment, but also transit and event ticketing, retail loyalty and other services.
With its plans to introduce its own payment service or scheme at the physical point of sale in Germany, Deutsche Telekom becomes the latest mobile operator to declare its intention to use NFC technology to enter the payments business. The list already includes the Isis joint venture partners, Telefónica O2 UK and some Asian telcos.
"The area of payment systems is a major driver of growth for Deutsche Telekom," Thomas Kiessling, Deutsche Telekom’s chief product and innovation officer, said in a statement today. "We have continuously invested in this business, and will continue to expand it–nationally and internationally."
Kerstin Baumgart, Deutsche Telekom’s vice president for business development, mobile products, and head of the Mobile Wallet program, acknowledged that launching its own payment scheme at the physical point of sale in Germany would be a "big challenge," especially to build the infrastructure of terminals at the point of sale. But she noted that besides mpass, Deutsche Telekom has experience in the payments business through its acquisition of Internet payment service provider Firstgate, known for its ClickandBuy brand.
In other markets with strong and dominant banks, such as the Netherlands, Deutsche Telekom is not planning to launch its own payment scheme. The telco’s branch operator there, T-Mobile Netherlands, is part of a group of the country’s three major mobile operators and three largest banks, dubbed the Six Pack. The group plans to roll out NFC payment in 2012.
"We’ll see a lot of different ways to manage payment," Baumgart told NFC Times. "When you have very strong banks with a very strong focus on retail and close relations with retailers, (then) we are partners."
Consumers will "not accept isolated solutions," Kiessling noted in today’s announcement. "They want to be able to pay as easily as they would in terms of cash or credit card. And with the 'Mobile Wallet,' we can offer our customers convenient and secure mobile payment."
Baumgart emphasized, however, that payment is a "starting point." Besides transport ticketing, examples of other services that could be part of the Deutsche Telekom mobile wallets are B2B applications launched by enterprises, such as access control.
In its announcement today, Deutsche Telekom also mentioned plans for a contactless ticketing service for stadium access at the European Football Championship 2012, which will be held in Poland and the Ukraine.
"NFC is an enabler, always has been and always will be," Baumgart told NFC Times, speaking from the Mobile World Congress in Barcelona, where Deutsche Telekom made today’s announcement. "Payment is one important application, but there are more to come."
The telco is expected to try to earn revenue from NFC by renting space on SIM cards to service providers and managing the applications there. In those markets in which it introduces its own payment service, it would earn transaction fees from merchants.
Deutsche Telekom group will coordinate the Mobile Wallet initiative centrally, including hiring a trusted service manager to provision and manage the payment and other secure applications on its SIM cards. It is expected to name the TSM soon.
The telco has already begun ordering NFC phones as a group. Most of the handsets are expected to arrive during the second half of 2011.
As NFC Times reported earlier, Deutsche Telekom would insist on phones that support the standard single-wire protocol, or SWP, connection between the NFC chip and SIM card. This would enable the secure NFC applications to be stored on the SIMs.
Deutsche Telekom also wants at least some of its NFC-enabled SIMs to support smart card Web server, or SCWS, NFC Times has learned. The software enables operators to put a Web-like user interface on the SIM card itself for mobile apps. This and the single-wire protocol would tie the telcos closer to customers.
Although it did not mention the project in today’s announcement, Deutsche Telekom’s T-Mobile UK branch is also planning an NFC launch this year as a part of its telco joint venture with France Telecom-Orange UK, Everything Everywhere. Everything Everywhere has announced it plans to launch NFC services with credit card issuer Barclaycard by early summer.