The worldwide use of mobile phones for payments at point of sale is
the aim of a new initiative announced today by the GSM Association
(GSMA), the global trade organization for mobile operators.
The ‘Pay-Buy Mobile’ initiative is a natural progression for the
industry, following the GSMA’s program – announced last year – to define
a common global approach to enabling Near Field Communications (NFC),
the technology used to link mobile devices with payment and contactless
systems. By embedding mobile contactless services, such as credit and
debit payments, in the SIM card the mobile industry will extend the role
of mobile phones in customers’ everyday lives.
Fourteen mobile operators are participating in the ‘Pay-Buy Mobile’
initiative, which seeks to define a common global experience for mobile
phone payments, on which seamlessly interoperable services will be
The fourteen operators, representing more than 900 million mobile
users, are Cingular Wireless, now part of the new AT&T; China Mobile;
KALL; KTF; MCI; MTN; NTT DoCoMo; Rogers Wireless; Smart Communications;
Telenor, TeliaSonera; Telecom Italia; Turkcell, and Vimpelcom.
“The mobile phone is now becoming an essential life management tool
for mobile users,” said Rob Conway, CEO of the GSM Association. “By
bringing payment capability into the device, users will benefit from the
ability to purchase items in a secure and convenient way from the
comfort of their own mobile phones, hailing an end to bulky wallets full
of notes and coins.”
Whilst various forms of mobile payment trials and services have been
announced, this is the first truly global approach to facilitate payment
by mobile. Secure, transparent mobile payments will be made using a SIM
Universal Integrated Circuit Card (UICC) card in mobile phones plus
contactless/NFC technology. The result will be an interoperable and
transparent service for mobile customers, financial institutions and the
This approach will further accelerate the efforts of the major
credit card companies, which developed the specifications to ensure
global interoperability between chip cards and Point of Sales (POS)
terminals, regardless of manufacturer, the financial institution and
location of transaction. The GSMA intends to work closely with leading
financial intermediaries to provide the transaction solutions.
The first phase of the GSMA initiative will begin with a business
model analysis followed by an end-to-end trial in Korea later this year.
The trial will be led by KTF and will include all key participants in
the value chain, from banks and credit card providers to retail
organizations and handset manufacturers. LG Electronics will provide
handsets for this initial trial in Korea. KTF will share the results of
its trial with the GSMA’s operator community as part of the program.
Following this, similar trials will be deployed involving other
operators and financial institutions.
Mobile phone based transactions are already becoming commonplace in
South Korea, where there are already more than 12 million mobile payment
enabled handsets in circulation, with 80,000 terminal payment machines
in shops, restaurants and cafes.
“We are delighted to work with the GSM Association through our
sponsoring and leading of the M-Payment project and a trial in Korea
that will help to define and shape the environment for M-Payments using
contactless technology in the international mobile community,” said Dr
Young-Chu Cho, CEO of KTF.
“By combining credit/debit card technology with the security level
represented by a SIM card and Near Field Communications technology, we
can make it really easy to use a mobile phone as a payment device”, said
Stein Hansen, Head of Group Technology at Telenor and Chairman of the
GSMA’s Executive Management Committee. “Through our experience from
several years of running commercial mobile payments solutions, we know
the value of offering services that are easily accessible. The GSMA
Pay-Buy Mobile Initiative can create a new global standard for POS
payments. Telenor is eager to support the GSMA in the development of
future mobile payment standards.”
“This GSMA initiative is both timely and critical,” noted Kris
Rinne, Senior Vice President – Architecture & Planning at Cingular
Wireless, part of the new AT&T. “Mobile Financial Services are poised to
grow quickly and to provide substantial value to wireless subscribers,
financial services providers, merchants and wireless operators. We are
delighted to be a part of this initiative.”
“Contactless technology will be the natural way for payments in the
near future. Through this initiative the GSMA is leading the path for
the implementation of a sustainable business model, including all
stakeholders in the contactless payment value chain, and starting the
development of innovative mobile payment services,” said Cenk Serdar,
Turkcell’s Chief Value Added Services Officer.
“MasterCard has long recognized the global opportunity presented by
mobile commerce,” said Art Kranzley, group executive, Advanced Payments,
MasterCard Worldwide. “The mobile phone has become a ubiquitous and
highly functional device, serving consumer needs well beyond making and
receiving calls. Making simple everyday payments with it represents a
natural next step, and MasterCard is proud to help make this possible.”
“Mobiles phone will connect the service and the end-user,” said Dr.
Woo-Young Kwak Vice President of LG Electronics Mobile Handset R&D
Center. “It is a real pleasure to contribute to the ‘Pay by Mobile’
initiative by providing LG Electronics’ mobile phones for the trial.”