Mobile payments partnerships between carriers and financial services companies are nothing new: Mastercard(s ma) and Deutsche Telekom, Visa(s v) and Vodafone(s vod)… the list goes on. But this one is a step beyond.
The Spanish telecoms giant Telefonica is to set up not just a partnership, but a full-blown joint venture with two of the county’s top banks, CaixaBank and Santander. The aim is to “develop new business opportunities based on the latest mobile and communications technologies”.
P2P payments and a retail community
First up will be an online community through which retailers can offer consumers discounts and promotions. The companies say they can reach more than 600,000 businesses in Spain alone, but their ambitions extend further afield – Telefonica and Santander are both global operations and plans are afoot to spread all these ventures around the world.
The joint venture will also create a new digital wallet service that will subsume customers’ various bank cards, along with a P2P mobile payment service for those within the community. According to the release, users will be able to send money to each other purely on the basis of knowing the recipient’s phone number – no bank details will be needed.
Because this is a joint venture, the competition authorities in Spain (and presumably at the EU level too) will need to give their approval. This is not a foregone conclusion: a similar joint venture called Weve that involved the UK operators Vodafone, EE and O2 (which is, of course, Telefonica) was slow to win approval due to complaints from rival operator Three, which hadn’t been invited to join the party.
Open for business?
If the new joint venture goes through, though, the companies promise other partners can hop aboard. There is also the “possibility that other entities could offer the services of the new company”.
It’s important that, unlike with Weve, both the telcos and banks are involved in this effort. Each industry has tended to work on its own scheme, with the threat of a serious rivalry being the result. That wouldn’t in itself be a bad thing, except for the fact that both banks and telcos have common enemies: Google(s goog), PayPal(s ebay), Square and all those other outsiders promising to bleed over from the tech world.
And so we see the legacy-industry banks and telcos finally seeing the value in cooperation. Taiwan has provided a similar example this week, with Chunghwa Telecom and four local banks also announcing partnership plans, but, given their reach and global potential, the joint venture between Telefonica, CaixaBank and Santander appears to be the most serious play in this space yet.