Apple Pay

Telcos Fear No Big Payday From Apple Pay

How should telcos around the world react to Apple Pay? Should they ride along and cooperate fully—potentially hurting their own mobile wallet efforts—and sell as much data, bandwidth and phones as possible? That would be a continuation of the telecom players’ existing model, conceding the lead on mobile payment to Apple.

“Apple and telecom operators (are) vying for an all-encompassing ecosystem, which includes shopping, file storage and sharing, music and video streaming, and now payments,” reports The Wall Street Journal, which quotes Deloitte analyst David Blackwell as saying “The device manufacturers can actually put that ecosystem together in a way that the telecom providers thus far have been unable to do.”

Softcard—the formerly-named ISIS group of AT&T, Verizon and T-Mobile—initially hinted that they would support Apple, but after the announcement, it became clear they only support was that they want Apple to include Softcard on the iPhone next year.

Telco mobile payment approaches are common. “In Europe, major operators like Vodafone—which launched the M-Pesa money transfer system in Africa–Orange and Deutsche Telekom all have their own wallet systems in key markets,” the Journal reported. “EE in the U.K has a mobile wallet. Telefónica doesn’t have a global mobile wallet but has a number of payment agreements, including the Yapp joint-venture with CaixaBank  and Banco Santander. Vodafone, which has an integrated mobile wallet service for Android devices in Italy, Germany, Spain and the Netherlands, is launching in the U.K. next month. The service is called Vodafone Wallet.”

On the one hand, Apple’s move—especially it’s embrace of NFC—could validate and enlarge the market for mobile payments, making consumers more comfortable with the idea. But whether that will help telco mobile wallet efforts or steamroll over those efforts is an open question.

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