Deutsche Telekom to supply NFC infrastructure

Thursday 11 April 2013 | 08:02 CET | Background

Deutsche Telekom has selected B+S Card Service and InterCard to provide technical services across Europe for the provision of NFC-based payments to business customers. An important condition for the uptake of contactless payment is the availability of suitable terminals in shops. Deutsche Telekom will offer the infrastructure and acceptance network for NFC-based payments, helping to build the rails needed for mobile payment.

B+S Card Service sells Point-of-Sale (POS) terminals and PIN equipment to merchants. The German company says it has over 227,000 customers in 14 European countries, though most of the revenue is generated in Germany. It operates over 160,000 payment terminals in Germany, over its dedicated network. The company facilitates most of the major credit cards, for debit cards and direct debit. It also offers e-commerce for shops that combine physical sales with a webshop – as many retailers do nowadays.

InterCard facilitates debit card, credit card and loyalty card transactions and offers risk management for debit transactions. As an acquirer, it claims a sizable market position with over 422 million transactions per year and a transaction volume of over EUR 21 billion. InterCard manages around 65,000 POS terminals, typically at large food and clothing retail chains.


The two companies will also support Deutsche Telekom with customer services. Together with Deutsche Telekom, they will jointly develop new POS solutions.  The partnership is not the only one DT has entered. In November 2012, DT announced a partnership with iZettle, to supply a mobile solution for an iPhone or iPad.

iZettle markets a card reader that allows (small) shop owners to accept credit card payments. iZettle charges no monthly fees, but a fixed fee per transaction of 2.75 percent. Recently, it launched a portable PIN and Chip reader, which pairs to a smartphone over Bluetooth.

Fixed network incumbent Deutsche Telekom traditionally has a strong position in the business market, offering a broad portfolio of services, including payment services. The investment in the merchant side will help pave the way for card-based contactless payment. That infrastructure is necessary for full-fat mobile payment and related m-commerce services.

Consumer services

Deutsche Telekom is also developing NFC mobile services for consumers. In July 2012, DT announced a long-term partnership with MasterCard. The two companies will develop payment services, including mobile payment. Deutsche Telekom has said at the time that it will launch a mobile wallet in 2013, based on a SIM card NFC solution. The first step was the launch of a Telecom/MasterCard debit card. The added NFC sticker enables contactless payment, albeit in a limited number of shops.

Deutsche Telekom is working with Austrian technology provider Skidata and Hamburger SV football club to test paperless entry to the stadium. Since start-November, HSV employees have been able to book digital tickets for home games and store those on the SIM card of their smartphones. The password-protected tickets are then stored in the MyWallet application. DT aims to make this payment system available to customers from mid-2013.

With MasterCard and several banks in Poland, T-Mobile is working on the NFC mobile payment ecosystem. The retail banks in that country started issuing dual mode cards some years ago, therefore contactless payment is viable. The MyWallet NFC-service was launched in October and now reports a number of 10,000 users for the app developed in cooperation with MasterCard and SIM card manufacturer Giesecke & Devriendt.

T-Mobile in the Czech Republic very recently introduced operator billing for Facebook games. Mobile customers can buy items in online games, such as Farmville and pay though T-Mobile from a postpaid package or out of prepaid credit. T-Mobile offers SMS-payment and QR-code related services as well.

In the Netherlands, so far only tentative announcements have been made. T-Mobile Netherlands has said earlier this year it will develop mobile payment services, but the operator is out on its own. T-Mobile withdrew from Sixpack - the Dutch NFC project - at the end of 2011. It is not involved in the follow-up, a smartphone-NFC-payment trial in the city of Leiden. That trial is run by four of the original Six, i.e. the three banks and KPN.

For operators the size of T-Mobile, taking developments in-house and creating a vertical solution would seem to make more sense from a strategy perspective. Services pioneered in one markets could be adopted in other markets. Local partnerships will probably prove necessary, especially in markets where T-Mobile is a challenger, to get m-payment up and running.

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