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Telefónica O2 begins mobile payments rollout in Germany with mPass contactless stickers

The telecoms giant is adding MasterCard PayPass stickers to the mPass service it operates with Vodafone and Deutsche Telekom, allowing users of the mcommerce and ecommerce payments service to also use it to make purchases in stores.

Telefonica's Michiel van Eldik

VAN ELDIK: “Our ecosystem around finance products is virtually complete”

Telefónica O2 Germany has begun the move to extend the mPass mcommerce and ecommerce payments service into the retail payments market.

mPass uses SMS notifications to allow customers to make online purchases with their mobile phone, without sharing their bank or card details with the merchant. Telefónica, with fellow German carriers Vodafone and Deutsche Telekom, first announced plans to extend their mPass service to stickers and NFC phones in August 2011.

Now, Telefónica has announced plans to issue customers with MasterCard branded payments stickers, allowing mPass to be used in retail stores for the first time. Customers will then be able to make purchases of up to €25 (US$32), without entering a PIN, at any merchant equipped to handle MasterCard PayPass contactless payments. Higher value transactions can also be performed, with the added security of a PIN being required.

Customers have two options for settling up the purchases they make. They can use their mPass account as a stored value card and top it up with funds from their bank account as required, or they can choose to have each payment debited directly from their bank account on an individual basis.

“Our ecosystem around finance products is virtually complete,” says Michiel van Eldik, Telefónica Germany’s managing director of wholesale and partner management. “The use of MasterCard PayPass and the collaboration with Wirecard represent an important step in this regard. In short, our mPass customers benefit when out shopping from an extensive network of points at which this type of contactless payment is accepted — both in Germany and worldwide.”

  • JC

    Was does this mean for the merchant?

    1. This doesn`t allow “underserved merchants” to accept payments with plastic, but it addresses to the actual base; that in addition must have a contactless reader.

    2. As far as I can understand, it doesn`t reduce the costs of the collection method: no lower interchange fee, no shorter settlement periods, no lower infrastructure cost, no shorter check-out process, etc. Or does it? What about interoperability with other CC issuers?

    3. 100% transaction-oriented, and I guess it is hard to increase engagement with a store or brand just for permuting “bumping” instead of swiping. That doesn`t help to sell more or increase the loyalty of your customer.

    Was does this mean for the consumer?

    1. It doesn`t help to enhance the shopping experience. The payment is just a part of it, and among the creditcard holders in the offline world not the most cumbersome.

    • http://www.sjb.co.uk Mike Clark

      I don’t think this is pitched as a holistic solution to all the problems in the retail and payments :)

      • JC

        So? what is it then the VP? How could it take off when in the same market, Germany, at this time you already have solutions with a better holistic approach and more attractive VP such as Payeleven or Sumup.

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