Telefónica Kickstarts Mobile Payments In Germany

“Soon, children will only know from history books what a wallet and hard cash are”, this is the bold statement made René Schuster, CEO of Telefónica Germany. And it might not be that far off. Telefónica is investing seriously in mobile payments in Germany: as of mid-February, a smartphone-to-smartphone direct money transfer service and a digital wallet will be available to its customers.

Telefónica is the first network operator in Germany to enable its customers to perform mobile-to-mobile transfers using the ‘mpass Geld senden’ service. This enables money to be transferred from one mpass account to another, virtually in real time. There is no need to disclose the recipient’s bank details. All you need is their mobile phone number.

The use of the transfer service is handled securely by the mpass app and requires the user to log in using their user name and password. The process of sending money is easy and free of charge. Simply select the field “Geld senden”, enter the recipient number, amount and an explanation or message for the transfer, then complete the payment. The transfer is performed practically in real time, so both the sender and recipient can see the transaction after just a few seconds. The user can obtain a list of all transactions via the app. The transfer service is available to customers who have signed up to use mpass in shops and have installed the mpass app.

Telefónica’s other product is the O2 Wallet, a digital wallet that allows customers to carry out contactless payments at shops accepting PayPass. All is needed are NFC-compatible smartphone and SIM card. The wallet is protected by a PIN and the NFC SIM card, where all the payment and security data is stored. The customers’ bank details are also afforded special protection with the use of a ‘trusted service manager’. This means that they remain solely with the credit institution and Telefónica has no access to them.

The launch of O2 Wallet is planned for mid-February in the form of a ‘friendly user test’. Here, customers volunteer to participate and their experiences are fed back into the continued development of the electronic wallet. O2 customers with an NFC-capable smartphone – either the Samsung Galaxy ACE2 or S3 – and who have ordered the free NFC pack with an NFC-capable SIM card are eligible to take part.

Over the course of the year, Telefónica will be expanding its wallet service to include additional applications and functions such as other payment cards, vouchers and loyalty schemes. The first bank will shortly be joining the wallet scheme, allowing the integration of a digitalised credit card.