A Netherlands-based group consisting of banks and mobile operators has agreed to form a joint-venture company to support Near Field Communication mobile payments at the point of sale in 2012.
Financial institutions ABN Amro Bank N.V., ING Group N.V. and Rabobank Group and mobile operators KPN N.V., Vodafone Group PLC and Deutsche Telekom AG’s T-Mobile are involved in the venture.
The group believes it is “technically and commercially feasible” to build a countrywide infrastructure for NFC mobile payments based on internal research the companies conducted.
“In terms of ease of use as well as safety, it is essential to create a single, uniform system for mobile transactions in the Netherlands based on international standards,” the group said in a statement. Officials from the companies were not immediately available to comment.
The companies did not say who would provide the handsets. Nokia Corp. could be an option. In June, the Finland-based handset manufacturer announced it would include an NFC chip in every one of its smart phones starting next year (see story).
T-Mobile also is involved in a rumored mobile-payments scheme in the United States involving AT&T Inc., Verizon Communications Inc., Discover Financial Services and Barclays PLC (see story).
The Netherlands joint venture is a significant development because it involves financial institutions from the start, says Red Gillen, a senior analyst with the banking research firm Celent LLC.
Financial institutions, however, are beginning to show more interest in mobile payments. Last month, Bank of America Corp. announced it is collaborating with Visa Inc. and DeviceFidelity Inc. on a mobile-payment trial involving microSD chip technology integrated with a mobile payment application (see story).
Gillen believes financial institutions’ anxiety over losing out on any mobile payments-related revenue is driving them to get more involved. “There is a fear among banks that someone else is going to step up and get involved [in mobile payments], and that’s why you are seeing banks getting involved now,” he says.
In the United States, Apple Inc. is becoming a threat to those companies investing in NFC development and trials. Apple never has stated publicly its intentions to enter the mobile-payments space, but observers believe an NFC-enabled iPhone is imminent based on several of its recent actions.
Apple recently hired former mFoundry executive Benjamin Vigier as product manager for mobile commerce. Apple also has filed patents related to NFC technology and an iPhone application that would initiate mobile payments (see story).
No talk has emerged of Apple involving a financial institution in its NFC developments.
Todd Ablowitz, president of Double Diamond Group, a Centennial, Colo.-based consulting firm, told PaymentsSource last month Apple could change the payments-business model in a way that could cause quite a disruption.
Payments “is arguably inefficient in terms of the value chain; it’s got entrenched long-term players, it’s got technology disruption ripe to happen, and it’s an ecosystem where a leader could make big gains,” Ablowitz said.