A mobile payment joint venture from the UK’s biggest carriers, first announced over a year ago, today finally received “unconditional” clearance from European regulators. The move means that now Vodafone, Telefonica’s O2 and Everything Everywhere (the JV from T-Mobile and Orange) can proceed developing a cross-carrier mobile payments platform — not unlike the Isis initiative in the U.S. They say they will be getting the service “up and running as quickly as possible,” although no launch dates or other specifics — including a name — have been announced. In other words, now the hard work begins.
Given that one of the biggest pain points in mobile payments has been lack of interoperability between platforms, this is potentially a big step in helping such services grow: the idea is that with a bigger potential audience to serve, bigger merchants, banks, payment providers, developers and handset makers will be more likely to make the necessary investments in infrastructure themselves.
In a statement today, the three operators said that the JV “received unconditional clearance.” Next up, they say, will be the hiring of people for the new JV and creating a new company.
Although payments is a big part of the JV, it’s not the only one. Also included will be a mobile marketing platform — expected to be the first part of the business brought to market, the carries note. Like payments, marketing and advertising are other areas that rely on scale to work profitably; and like payments, it’s another area that is currently highly fragmented.
“It will provide a single contact point for media agencies, retailers and brands, enabling them to create campaigns that will reach millions of opted-in mobile users. This will apply across the majority of handsets, operating systems and mobile operators. For consumers, this means they will be able to receive the discounts and offers that they want to receive from the brands that are relevant to them,” the carriers note in their statement.
The commerce portion will focus on the development of a mobile wallet that will let users pay for goods as well as accrue loyalty and reward points with retailers. (Indeed, the two of these seem to be going increasingly hand-in-hand.)
We have already started to see some advances in this area from individual operators: just last week, Everything Everywhere announced a partnership with MasterCard to develop a prepaid mobile service that would form the basis of a service to offer mobile wallet functions to its subscribers.
Although there is not much detail in the statement today on technology, it looks like NFC and online purchases will both be involved.
One of the big sticking issues for the JV up to now has been whether this is a violation of antitrust regulations — specifically whether smaller operators like Hutchison’s Three would be cut out of the equation. Although Three has been lobbying against this JV since it was first announced in June 2011, it looks like they’ve not gotten what they wanted. Still the JV is making some assurances that it will be addressing the little people, too:
“The shareholders remain committed to making the JV services open to all,” they write, “including all operators and MVNOs, 3rd party publishers, banks, advertising agencies, retailers and any company that wants to engage in this space. The partners in the JV believe it has an important role to play in helping to keep the UK at the forefront of digital innovation, creating jobs, promoting innovation and stimulating competition.”
Whether that will mean a truly level playing field even for competitors remains to be seen.
And so will whether these three typically competitive operators will be able to put down their swords to actually work together on a wider initiative for the greater good. They have a pretty paltry track record — there have been cross operator initiatives before that have failed — but now they have the fire of Apple and Google also in the game to keep them moving.