Deutsche Telekom Partner on Mobile Payments, MasterCard

Credit card giant MasterCard and mobile carrier Deutsche Telekom announced on Monday that they are teaming up for an effort to advance mobile payments across Europe.

The companies aim to "build a comprehensive ecosystem around mobile payment," allowing Deutsche Telekom's 93 million mobile customers across Europe to use their mobile phones to pay for goods and services, Thomas Kiessling, chief product and innovation officer for Deutsche Telekom, said in a statement. The new system will roll out later this year starting in Poland, followed soon thereafter in Deutsche Telekom's home country of Germany.
"This is a huge step on our way to increase mobile payments," Kiessling added.

To begin the effort, Deutsche Telekom will offer payment cards that come with a near field communication (NFC) chip that can be used to make a purchase by simply moving it close to a card reader, Bloomberg reported. This will be followed in the first half of next year by a true mobile wallet service, utilizing NFC technology integrated into mobile phone SIM cards.
The system will also be open to competing banks and carriers. The companies said the new mobile wallet service will be not only convenient, but also secure and transparent, as each transaction will be confirmed via text message.

"The payment space continues to be ripe for innovation, particularly at a time when we're seeing an accelerating movement away from cash — driven by technology," Ann Cairns, president of international markets for MasterCard Worldwide, said in a statement. "MasterCard's heritage is rooted in the creation of open technology, designed for everyone wanting to benefit from a more convenient and secure shopping experience."

The move comes about two months after MasterCard announced its digital wallet program, PayPass Wallet, which will let its cardholders and partners securely pay with phones or online. MasterCard said that the PayPass Wallet would have three components: an Acceptance Network for electronics payments online and in stores; the Wallet itself, which will allow banks to white-label their own wallets; and an accompanying API, allowing third-party solutions and wallets to tap into the network itself.


Meanwhile, recent rumors indicate that Apple's next-generation iPhone, expected to be launched this fall, could include a NFC chip to enable mobile payments. While mobile payments haven't really taken off with the masses here in the U.S., some 65 percent of experts surveyed earlier this year said they think most people will fully adopt mobile payments by 2020. For more, check out: Are Mobile Payments Ready for Primetime? Square CTO Weighs In.