Year in review 2012: Operators lay foundation for mobile payments success in 2013


The news: The European mobile payments market remains a tangled web of joint ventures, alliances and individual initiatives. Unlike elsewhere in the world, most notably perhaps Japan and Africa, using a handset for making a payment has remained more of interest to the providers than the potential users.

However, the Swedish operator alliance, known as T4, did move forward in January with the announcement that it had selected PayEx and Accumulate as the payment and security vendors for its NFC-based mobile payment platform. Telia, Tele2, Telenor and 3 said the service should make its commercial launch in the summer and be available to 97 per cent of Swedish mobile subscribers and all handsets produced after 2006. The operators did wind up launching the service in late June under the WyWallet brand.

This move was followed in March with UK operators Vodafone, Everything Everywhere and Telefónica's O2 UK submitting their joint plans to create a mobile wallet joint venture to the Europe Union. The JV said that the service, codenamed "Project Oscar," would run as an independent platform and would be open to all. However, No. 4 operator 3 UK was not invited to join, and labelled the project as discriminatory.

A month later, KPMG published research claiming that m-payments were expected to grow nearly 100 per cent per year-over-year for the next three years, reaching a value of £591 billion (€717 billion) by 2015 and driven by the adoption of smartphones and tablets.

Deutsche Telekom said in July it was in talks with Google over expanding its mobile payments system. However, the German company's chief product and innovation officer, Thomas Kiessling, said it was in talks with a number of credit card companies and banks as it looked to expand its mobile commerce capabilities.

A notable failure in 2012 was the collapse of the m-wallet alliance formed in the Netherlands by KPN and Vodafone, together with banks ABN Amro, ING and Rabobank. The "Sixpack" project was stopped after legal and competition issues arose, with the JV being more complex than partners initially thought.

By November, EE, O2 UK and Vodafone had branded their m-payments service as Weve, with the promise that it would launch early in 2013. The new company, which aims to recruit around 150 people, said that 3 UK and Virgin Media could become involved and was looking to generate revenue of £1 billion in five years.

Danish operators Telia, TDC, Telenor and 3 Denmark announced soon after that they had joined forces to launch a company to develop a common platform for mobile payments.

Why it was significant: The struggle by Europe's operators to launch mobile payments has been due to tough regulation, the strong position held by the financial services firms and reluctance by consumers to use the new services.

The alliances formed by operators have largely managed to convince regulators they are capable of providing a reliable and secure service, and the financial community has recognised the value the operators provide, but consumers now need to be convinced of the benefit of mobile payments.

These services are complex to develop and deploy, and in 2012 operators laid the foundation to get ready for wider commercial deployments and success in 2013.