MasterCard and Deutsche Telekom Agree NFC Mobile Payment Deal

Mastercard and Deutsche Telekom have agreed a European partnership to bring mobile payment products using near field communications (NFC)  to its 93 million customers in the region.

The first consumer roll-out will take place in Poland later this year, followed by Germany and other unspecified European countries, although there is no mention of the UK as yet. Deutsche Telekom, which owns half of UK network Everything Everywhere, said that the deal will give its customers “convenient and secure” ways to pay.

NFC starts in Poland

“This is a huge step on our way to increase mobile payments. With MasterCard we have a well-known and experienced partner generating growth in this important market segment,” said Thomas Kiessling, chief product and innovation officer for Deutsche Telekom.  “We want to build a comprehensive ecosystem around mobile payment, helping Telekom to realise its strategy of being the first choice for customers regarding connected life and work.”

The roll-out will begin with mobile phone tags and cards and will continue into the first half of 2013 with a mobile wallet service, which will be open to other issuing banks and partners. Deutsche Telekom has promised that payments will be secure and 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,” said Ann Cairns, president of international markets for MasterCard Worldwide. “The mobile wallet service is open to other issuing banks and partners, helping support our customers in adapting to new consumer behaviours and changing market dynamics. Through today’s announcement we are showcasing a real meeting of the minds and that’s where true partnerships come from.”

NFC for Non-NFC devices

MasterCard also has a contactless payment service, PayPass, which uses Near Field Communication (NFC) technology and is supported by devices from a number of manufacturers. Rival Visa will provide mobile payment services to the Olympic park this summer.

“Deutsche Telekom (DT) is working to ready the market and strengthen its brand association with financial services by becoming a credit card issuer for MasterCard,” commented Ovum analysts Angel Dobardziev and Eden Zoller. “DT is looking to improve the retail infrastructure for mobile payments by acting as a sales partner for NFC enabled Point of Sale (POS) terminals. It is providing NFC tags for consumers that do not have NFC enabled devices.”

“DT is also taking a considered, phased approach to service roll out, which is no bad thing, starting in Poland this year and Germany in 2013,” they added.

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