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Deutsche Telekom in Talks With Google on Mobile Payments

July 03, 2012

Deutsche Telekom in Talks With Google on Mobile Wallet Platform

The Google Inc. Mobile Wallet card for cardless payment sits on display at the Mobile World Congress in Barcelona. Photographer: Chris Ratcliffe/Bloomberg

Deutsche Telekom AG (DTE) is in discussions with Google Inc. (GOOG:US) along with credit-card companies and banks to add partners to its mobile-payment system, Thomas Kiessling, the German company’s head of innovation, said in an interview.

Europe’s second-largest phone company yesterday unveiled an alliance with Mastercard Inc. (MA:US) in Europe over its mobile wallet, which allows customers to pay bills using account information stored on handsets. While banks and software companies are working on their own offerings and 50 to 60 different mobile wallets are entering the market, only three or four platforms will survive, Kiessling said.

“We’re talking to other players in the market, and even a cooperation with Google is theoretically possible,” Kiessling, whose title is chief product and innovation officer, said in Berlin yesterday. “We’re in talks there as well,” he said, declining to specify potential areas of cooperation.

Deutsche Telekom is targeting its mobile-payment service at its 93 million wireless customers in Europe, a region where 57 percent of all purchases are still paid for in cash, according to the Bonn-based company. Google, which introduced Google Wallet in the U.S. last year, is considering changes to the offering including sharing revenue with phone companies after its slow adoption, people familiar with the situation said in March.

Payment Revenue

Stefan Keuchel, a Hamburg-based spokesman for Mountain View, California- based Google, declined to immediately comment.

In Europe, revenue from processing payments via credit cards, bank transfers and other means is set to grow to 13 billion euros ($16.4 billion) by 2016 from 11 billion euros this year, Kiessling said. The region will see a proliferation of contact-less payment technologies such as near-field communication, he said, adding that the carrier will help install such terminals in stores.

Enlisting other payment enablers for its mobile wallet platform may attract more consumers, Kiessling said. Cooperation with other telecommunications companies to standardize mobile- wallet technology only makes sense in the medium term once a certain level of acceptance among consumers is reached, he said.

“In many areas you shouldn’t wait for standardization, because that’s how the telcos missed a series of innovations over the past 10 years,” the executive said. “We tried to standardize advanced messaging globally and in the end other industries were faster.”

Mozilla Platform

With 60 percent to 70 percent of commerce occurring locally, standardization may also inhibit success in Deutsche Telekom’s various national markets in Europe, where it’s better to find tailored solutions with vendors and other partners, Kiessling said. The carrier, which holds a license to handle financial transactions via its Clickandbuy unit, plans to roll out its mobile wallet in Poland in August, followed by its German home market next year.

AT&T Inc. (T:US), Verizon Communications Inc. (VZ:US) and Deutsche Telekom’s T-Mobile USA unit in 2010 teamed up through a joint venture dubbed ISIS to provider their own mobile wallet platform. That alliance will unveil its first product this year, Kiessling said.

Separately, Deutsche Telekom is evaluating offering devices with an open mobile operating system from Mozilla Corp. in some of its eastern European markets, Kiessling said. Such handsets would initially cost about 80 euros to 100 euros and it’s too early to specify a date when the phones would start selling, he said.

Poland is one of several markets where the renown of the Mozilla brand may help the platform succeed, he said. Telefonica SA said yesterday it will offer phones running the platform, a competitor to Google’s Android, in Brazil in early 2013.

To contact the reporter on this story: Cornelius Rahn in Frankfurt at crahn2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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  • GOOG
    (Google Inc)
    • $596.08 USD
    • 6.81
    • 1.14%
  • MA
    (MasterCard Inc)
    • $77.28 USD
    • -0.52
    • -0.67%
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