Telefonica Signs Mobile Payments Deals With Facebook, Google, Microsoft

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined
as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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Network looks to take advantage of its billing network across Europe for mobile payments

Telefonica, parent company of O2, has signed global mobile payment agreements with Facebook, Google, Microsoft and RIM.

The operator has signed framework agreements to offer direct billing to its new partners and has started to roll out the capability in Europe. Telefonica plans to have it live in 14 of its operating businesses globally by the end of the year.

Telefonica believes mobile payments offer a simple and convenient way to purchase real and virtual goods using smartphones, and avoids the need to use a credit card. Today’s agreements mean that when users make Facebook payments or pay for apps on the Google Play, Windows Phone Marketplace and BlackBerry App World online stores, they will get charged on their phone bill.

Here’s your bill

“Few organisations can claim to have a direct billing relationship with hundreds of millions of customers globally,” said Matthew Key, chairman and CEO of Telefonica Digital. “The creation of Telefonica Digital has allowed us to better harness the power of this capability and use it to help drive the mobile monetisation strategies of some of the world’s largest technology companies. We believe that direct to bill will become an increasingly significant part of the overall mobile commerce market.”

According to its research, more than one third of European smartphone owners have made payments using their device and in Germany alone 400,000 customers do so every month. Telefonica sees emerging markets as lucrative areas for expansion, given that in Latin America only 40 percent of people have bank accounts.

“Mobile payments are an important part of the business model for mobile web developers, but today the options are too complicated for users,” said Dan Rose, vice president of partnerships at Facebook. “We’re excited to be working with Telefonica to implement a streamlined operator billing solution that simplifies the purchase process for their consumers and expands pricing options for mobile web developers.”

In April, O2 launched O2 wallet, its new payment service that combines secure money transfers, shopping and price comparison for iPhone, Android and BlackBerry users. It also submitted plans to the European Commission with Vodafone and Everything Everywhere to create a company responsible for developing and advertising a mobile payments platform.

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