UK ops enter NFC joint venture

Michael Carroll
17 Jun 2011
00:00

Three of the UK’s largest mobile operators are seeking to answer the question of who controls the secure element in mobile payments, forming a joint venture to handle all aspects of NFC-enabled transactions.

EverythingEverywhere, Telefonica O2 and Vodafone aim to open the venture by the year-end, offering device and operator-agnostic mobile payment technology to advertising and marketing firms, retailers and banks.

The trio will use the SIM to ensure the security of transactions, as they seek to end continuing debates over whether operators or handset vendors should handle consumer protection.

Guillermo Escofet, principal analyst at Informa Telecoms & Media, told Telecom Asia.net operators are keen to embed the secure element in the SIM because it is the “only piece of handset real estate they still control.” However he predicts the new service will have little impact on handset vendor’s efforts to embed m-payment security in their devices, noting the collaboration is more about offering “one point of access to service providers.”

The carriers will also use the technology developed by the joint venture to compete head on with their own commercial offerings. It is a model that could be replicated globally, Telefonica UK chief Ronan Dunne notes.

Sergio Silvestre, vice president of marketing at revenue assurance firm WeDo Technologies, notes the joint venture could be the boost NFC services have been waiting for, but only if the carriers protect their revenue streams. “Identity theft, malware, viruses and even radio frequency interference are all common causes of NFC failure,” he told TA.net. He believes carriers will need “to monitor and detect fraud, and overall revenue leakage in the ecosystem,” to protect themselves and build customer confidence in the set-up.

Each member of the joint venture has previous experience to draw on. O2 trialed an-NFC payment service in London in 2008 and parent company Telefonica recently started a trial through its Spanish workforce.

EverythingEverywhere partner Orange, meanwhile, recently launched QuickTap in conjunction with Barclaycard, while Vodafone has attracted up to 24.5 million subscribers in seven countries with its M-PESA money transfer service – though a spokeswoman noted the service uses a “very different technology” to that proposed in its NFC joint venture.

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