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Pay by Cell Phone to Get Easy in Europe

Posted on: Thursday, 27 February 2003, 06:00 CST

Pay by Cell Phone to Get Easy in Europe

source: Associated Press Tech News

By MATT MOORE, AP Business Writer

STOCKHOLM, Sweden - The future of commerce on the go — like paying for a cup of coffee with a few clicks on a cell phone, perhaps — is getting closer now that four of Europe's biggest wireless carriers have formed a clearinghouse to boost mobile payments.

The operators — Spain's Telefonica Moviles SA, Germany's T-Mobile AG and Britain's Orange SA and Vodafone Group PLC — unveiled plans Wednesday to offer secure payments between merchants, cell phone users and banks.

Dubbed the Mobile Payment Services Association, the service will be launched in Europe, but with an eye toward markets in the United States and Asia next year.

Tim Jones, the association's chief executive, said the service can push mobile commerce forward by creating a single brand for processing payments.

Ostensibly, the market for buying goods with a cell phone is limited. Users can go online, using a phone's built-in Web browser, and order flowers from a Web site, provided the details of a credit or debit card are stored in a virtual wallet.

The new clearinghouse, Jones said, offers more, taking card payments directly from mobile phone users and storing the financial information for future transactions. The service will cover small purchases, typically no more than 10 euros ($10.80).

"There is a growing experience already of customers, often younger people, buying logos and ring tones," he said.

Edward Holland, a spokesman for Madrid-based Telefonica Moviles, said the clearinghouse can speed along the goal of making mobile payments more convenient.

By incorporating wireless operators from across Europe, users who live in Spain can download a new ring tone and bill it to their account even if they are traveling in Sweden.

Eventually, though, the system will lead to mobile payments for more than cell phone downloads, said John Strand, CEO of Copenhagen, Denmark-based Strand Consult.

"We'll hear `Will this be a credit card transaction or just a mobile transaction?'" he said. "It could be done."

Last year, the amount of money spent globally for phone accouterments like ring tones and logos was an estimated $1.6 billion, according to Ovum, a research firm. By 2006, Ovum projects wireless commerce could reach $37 billion.

The four operators in the wireless payment consortium have a large presence abroad, including Telefonica Moviles, which has more than 33 million users in Europe, Latin America and the Mediterranean.

T-Mobile has millions of subscribers in Germany and the United States. London-based Orange is one of Europe's largest mobile phone operators, with more than 40 million subscribers, and Britain's Vodafone counts more than 112.5 million wireless users worldwide, including Asia, the Middle East and Africa.

Bryan Prohm, an analyst with Gartner Dataquest in Raleigh, N.C., said the clearinghouse is an important step forward.

"That's the uniqueness of being mobile, the open-ended possibilities," he said. "There are going to be a lot of trial balloons that may go over like lead Zeppelins. But then again, you may download your Led Zeppelin MP3 into your phone."

___

On the Net:

http://www.vodafone.com

http://www.telefonicamoviles.com

http://www.tmobile.com

http://www.orange.co.uk

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