No. 1 UK Telco EE to Introduce Own Payments Service with NFC Launch

Everything Everywhere, the UK’s largest mobile operator, will promote its own payments service with its planned launch of NFC this month.

The telco, which refers to itself as EE, is working with MasterCard Worldwide to launch the co-branded prepaid payment application on its SIM cards. In its announcement last August of a five-year partnership with Everything Everywhere, MasterCard said that an NFC-enabled prepaid application supporting its contactless PayPass technology would be among the first services to launch from the deal.

That service, Cash on Tap, is scheduled to begin July 17, enabling consumers to tap to pay for purchases of up to £20 (US$30.15) at what the telco said are 230,000 locations that accept PayPass in the UK. UK-based prepaid program service provider PrePay Technologies, which is partly owned by MasterCard, will issue and manage the mobile card. There will not be a companion physical card, an Everything Everywhere spokesman told NFC Times.

The launch would make EE, which is a joint venture of Orange UK and T-Mobile UK, perhaps the first major telco in Europe to enter the payments business with NFC. Competing UK operators Telefónica O2 and Vodafone have not yet launched their own planned NFC payments services.

And elsewhere, Deutsche Telekom in Germany plans to issue its own PayPass application this summer, but it hasn’t commercially launched the service, either. Orange Poland did launch a prepaid co-branded NFC payment service, called Orange Cash, last fall supporting PayPass. The application is issued by BRE Bank.

Major mobile operator groups in Europe last year signed deals with MasterCard and Visa Europe to introduce their own payments services in their forthcoming NFC-enabled mobile wallets. The telcos see payments as a way to enhance their brands, reduce churn, earn some transaction revenue and also offer related mobile-commerce services. For the latter, they could make use of the transaction data they collect from their payment applications.

“Payment is only the core service; the real value of mobile payment comes with the additional services, which can be provided on top,” Christian von Hammel-Bonten, executive vice president of telecommunications for Germany-based Wirecard, told NFC Times. Wirecard is a prepaid program manager, credit card issuer and processor, which is working with Deutsche Telekom, Telefónica O2 Germany, SFR and at least four Vodafone branch operators to launch payments this year.

“The data from the payment transactions combined with the capabilities of the always-online smartphones allows issuers and their partners to provide various additional services to cardholders as well as merchants, like couponing and loyalty services,” he said.

At launch, EE will only be offering its prepaid payments service, with no other applications in its Tap Wallet, a spokesman confirmed to NFC Times. The telco said it would later offer tickets and loyalty cards “on tap,” and other services.

EE might offer more mobile-commerce applications when the m-commerce platform being built by its Weve joint venture with O2 UK and Vodafone UK is ready, probably next year, though it is reportedly trialing NFC-based loyalty. EE’s mobile wallet is expected to comply with standards and rules the joint venture is drafting. The three telcos in the venture had always planned to promote their own mobile wallets and services.

EE, like other telcos getting more deeply into the payments business with NFC, also plan to offer space on their SIMs to banks for their own applications, usually in exchange for SIM rental or related fees. Some banks are balking at the fees, however, and some might also view the telcos as competitors in the payments business.  

The UK is among the countries that Samsung Electronics is targeting with the embedded chips in its NFC phones, which it hopes to enable for payment applications with such brands as Visa and MasterCard.

The Samsung NFC phones will also support a single-wire protocol connection to the NFC SIM, and EE said Wednesday that two of the first phones it is offering for its Cash on Tap service are the Samsung Galaxy S4 and Samsung Galaxy S III LTE, along with the Sony Xperia SP. All are Android phones.

Users would download the Tap Wallet from the Google Play store. EE is offering a £10 incentive for eligible customers to try out the service.

The telco said in its press material Wednesday that the Cash on Tap service will work even with the phone switched off. But users also could PIN protect the application or wallet. EE announced the Cash on Tap service along with its new super-fast 4G network services.

The EE spokesman told NFC Times that Cash on Tap does not replace the Quick Tap NFC service that EE member telco Orange UK and UK issuer and acquirer Barclaycard launched in 2011. But the Quick Tap service appears to be largely dormant.

 

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