German banks are reluctant to partner with mobile-telecommunication companies to provide mobile-payment solutions, according to a study published Wednesday by Mummert + Partner Unternehmensberatung AG. Only 28 percent of the 100 banks surveyed say they intend to cooperate with mobile-phone operators within the next three years.
Mobile payments are expected to play a huge role in new Internet-based services, such as GPRS (Global Packet Radio Service) and 3G (third generation). Already operators bill customers for phone usage via the SIM (Subscriber Identification Module) chip, and some are extending that service to allow customers to buy products and services over their phones and charge them to their telephone bill. But the operators would also like to offer customers the option of paying by keying their credit or bank-card number into the phone itself. That requires cooperation with banks that, at least in Germany, are hesitant about hooking up with mobile operators for fear of losing their customer relationships.
"At the end of the day, the banks are very protective of their debit and credit card business and are worried that mobile operators could take ownership of their customers," said Rohland Heintz, a spokesman for Mummert + Partner, which is based in Hamburg. "They prefer to see cell phones serve as a neutral payment device, equipped with a slot to slide through credit cards. Mobile operators, understandably, would like to have a bigger piece of the business and would, for instance, prefer to see a credit card feature integrated in the SIM function."
Before the German government awarded 3G licenses in 2000, several mobile operators, notably MobilCom AG in Rendsburg-Budelsdorf, Germany, were toying with the idea of applying for banking licenses and establishing their own financial services. In this way, they could have bypassed the banks. Since then, largely due to the billions of dollars of debt incurred from acquiring the licenses, operators have either put these plans on hold or abandoned them altogether.
"Banks and mobile telecommunication companies need to cooperate in the area of online payments," said Wilhelm Alms, chief executive officer of Mummert + Partner, in a written statement. "And they should do so before the end of this year so that mobile payments in new 3G networks are not an issue."
Of the 11,000 end users interviewed for the survey, around 70 percent said they would use their mobile phones to pay for goods and services and perform other money transactions.