Strategy Analytics has released a report lauding the newly announced mobile marketing and mobile payments joint venture between Everything Everywhere, Telefonica O2 and Vodafone in the UK as a “positive move” that will enable the mobile operators to secure a position at the heart of the nascent NFC contactless payments ecosystem.
The report, “Collaboration Essential to Operator Success in Proximity Payments,” advocates the importance of successful mobile operator partnerships to reduce fragmentation, boost scale, and help position strongly against competitors, such as Google Wallet.
According to the report, working together puts mobile operators in a better position to drive the availability of NFC handsets. Collaboration also creates scale, which is more likely to attract payment service issuers such as banks, as well as drive interoperability.
Nitesh Patel, senior analyst for Strategy Analytics, comments: “Banks and retailers are interested in scale and reduced complexity. Banks do not want to work with each operator and handset vendor individually in order to enable all customers to make mobile payments. Similarly, retailers do not want to upgrade point-of-sale infrastructure to accept contactless payments if customers of only one or two mobile operators can use it. This multi-carrier agreement between Everything Everywhere, Telefonica O2 and Vodafone in the UK has the potential to overcome these challenges and allow operators to compete with solutions like Google Wallet, which will initially be limited to Android handsets only.”
David MacQueen, director at Strategy Analytics, adds: “Mobile operators do not have a long track record of success when it comes to collaborations. The Mobile Payment Services Association, a previous mobile payment joint venture launched by UK operators in 2003, failed to get off the ground and was subsequently dismantled. Furthermore, mobile operators are not well known for moving fast. So, while this joint venture is a positive step we remain cautious about its chance for success. In particular we look forward to seeing how the operators differentiate their respective payment offerings.”