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What Do The German Telcos Know That We Don't?

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8 September 2011
Zilvinas Bareisis
A few weeks ago in August, while the rest of Europe was on holiday, three leading German telecom operators announced a joint venture aimed at bringing NFC payments to the German market. The three operators - Vodafone, Telefónica and Deutsche Telekom - are planning to launch under Mpass brand in early 2012. Mpass is an existing SMS-based service which German consumers can use for Internet shopping and charge their purchases to a pre-registered bank account. Recognising the shortage of NFC phones, the new Mpass service will start with NFC stickers. It is easy to think of it as yet another telco JV. Haven't we all been following Isis in the US or similar announcements from the UK? However, it seems that there are some important differences in these plans. Isis did have plans to launch a new payment brand, but have since scaled down their ambitions and decided to partner with all the major existing card schemes, such as Visa, MasterCard and others. The UK operators have been less explicit about their plans, but they do stress that their JV is about creating an infrastructure and a single point of contact from telco perspective for other players interested to bringing NFC services to market. In addition to retailers and marketeers, that includes banks for payment services. In contrast, the German operators clearly aim to introduce a new payment brand, mpass, and expect to sign-up enough merchants to create the necessary acceptance infrastructure. Instead of working with banks or existing card schemes, it plans to work with prepaid payment services providers, such as easycash. Celent has always been suspicious of new payment schemes, which are incredibly hard to launch. And the mobile operators (all over the world) are not known for nimbleness of their cooperative efforts. Just as it appears that carriers have finally conceded that they would need to cooperate with banks and existing payment schemes, here comes another major telco-only initiative. What do the German telcos know or have that the rest don't?

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