Collaborating with the competition
Article:
In Denmark, Telenor and its three main competitors, TDC, Telia and HI3G, have established a joint venture with the goal to develop mobile payments. The first solution will be ready this year.
NFC-technology will transform your mobile phone into a digital wallet encompassing membership cards, charge cards, access cards etc.
Denmark’s four leading operators have established a new common joint venture, which will give Danes a safe and user-friendly way to pay with a mobile phone. The joint venture is between Telenor, TDC, Telia and HI3G, and is called 4T Mobile Payments.
Initially, 4T will focus on SMS payments and will later allow mobile customers to pay for goods online by entering their phone number instead of a credit card number. Near Field Communication will be part of the solution in the long term.
”Smartphones are about to become the next payment vehicle. Even now many Danes buy bus and parking tickets by using their mobile phones. 4T will drive progress towards advanced mobile payment solutions that will simplify the Danish daily life without compromising security,” says Marek Slacik, CEO Telenor Denmark.
The CEO of the new joint venture explains the future plans.
“We start out by putting focus on mobile payments as we know it today; bus and train tickets, parking tickets and voting by SMS, all of which can be done with SMS or apps, where the amount is deducted on the phone bill or the customer’s bank account. The next phase is mobile payment in eCommerce. Instead of having to enter a 16-digit credit card number, expiration date and security code, you will be able to enter the mobile number, confirm the deal with a PIN code and money is drawn from the bank account,” says Peter Bredgaard, CEO of the newly formed 4T.
In order for it to become possible to use smartphones instead of cash when buying goods in actual stores, smartphones with NFC technology have to become more common among Danish mobile customers. In addition, the retail-segment has to acquire and provide NFC-ready terminals, enabling customers to pay with their smartphones.
The initiative is welcomed by Coop Danmark A/S, Denmark’s leading consumer goods retailer, which operates several retail chains. In April, Coop said it will offer mobile payment solutions in all their 1200 outlets within one year.
From simple to advanced
The joint venture in Denmark will perform in three phases:
Phase 1: Payment by SMS and apps
During the first phase, existing mobile payments such as payment of tickets and donations are transferred to 4T. This will occur in 2013. Mobile users will therefore continue to send SMS when voting for their favorites in game shows. In the future, customers will be directly debited from their bank account instead of via a mobile bill. Furthermore, a person-to-person transfer is in the pipeline.
Phase 2: eCommerce
During the second phase, mobile payments will be introduced in connection with eCommerce. When a customer buys a product online and reaches the payment page, mobile payment will be one of the possibilities. The customer will simply enter his/her mobile phone number and confirm the purchase with a PIN. Online purchases are thereby made more secure and above all easier.
Phase 3: Payment in actual storesDuring the third phase, customers may add other cards to their digital wallet – for instance the membership card to a fitness center, charge cards to department stores, discount coupons, entry cards to amusement parks etc. In the long term, NFC will be part of the solution. This phase requires infrastructure development to identify the customer in shops, fitness centers, amusement parks etc.