Deutsche Telekom positions itself for the payment market
Jul 02, 2012
- Simple, safe and convenient - an ecosystem for mobile payments
- Unique end-to-end strategy brings together Deutsche Telekom’s strengths for the payment market
- Mobile wallet for customers is at the heart of the new payment world
No change, long lines at the cash desk or machines out of service - with mobile payments by cellphone, these situations are all a thing of the past. Currently, almost 60 percent of all payment transactions processed in the German retail sector are cash transactions. The mobile phone is already increasingly evolving into a transaction platform, with experts predicting that it will replace cash and "physical" payment cards at some point in the future.
To meet this trend head-on, Deutsche Telekom is establishing an ecosystem for mobile payments which provides an end-to-end service for private customers and retailers. The strengths that Deutsche Telekom brings to the payment sector are its existing relationships with more than 90 million mobile customers in Europe, a familiar, reliable brand, local presence in the markets, and high security standards. In addition, with its ClickandBuy subsidiary, Deutsche Telekom already has an established player in the payment market.
Deutsche Telekom's payment ecosystem is based on four strategic pillars:
- Online Payment
Thanks to Deutsche Telekom’s ClickandBuy subsidiary, this is an established area with 14 million customers and many high-profile partners.
- Mobile Wallet
In the future, the smartphone will become a mobile wallet. In addition to actual payments, it will also enable applications like ticketing, couponing or unlocking cars or houses. Deutsche Telekom is not only offering its customers the option of keeping their debit and credit cards safe in their wallet, but also their customer loyalty cards, admission tickets, or travel tickets. In line with its Group strategy, Deutsche Telekom is also a secure enabler for partner company applications. The mobile wallet will launch this year in Poland, and in the first half of 2013 in Germany. Launches in additional countries are also planned.
In the medium-to long-term, Deutsche Telekom will also integrate additional options into the mobile wallet, for example, an option for receiving mobile coupons on your mobile phone directly and redeeming them in-store, and an option for transferring money directly between mobile end devices.
- Issuing payment cards
To complete its portfolio, Deutsche Telekom will issue its own payment product through its ClickandBuy subsidiary. ClickandBuy's e-money license allows Deutsche Telekom to issue payment cards itself (i.e. without a partner bank in the background). It will enter into a strategic partnership with MasterCard for this purpose.
Deutsche Telekom will also enter the key area of distributing NFC-capable terminals to retail outlets. This will solve the "chicken-and-egg" problem of contactless and mobile payments. The company will act as a partner for the sale of POS terminals and develop a sustainable infrastructure. Initial success has already been achieved through a collaboration with apcoa, Europe's largest parking space management company.
With this strategy, Deutsche Telekom is taking steps to ensure it is on-track to profit from the continuing evolution of the payment market over the coming years. The company addresses both parties in the payment cycle: For all of its customers' needs, Deutsche Telekom offers secure, easy-to-use solutions - online, mobile or at the POS. Deutsche Telekom simultaneously offers retailers payment and marketing solutions from a single source that can be implemented across all sales channels.
The Deutsche Telekom solutions in the payments area will score points thanks to the specific expertise offered by a telecommunications company. With its SIM cards - in contrast to payment services that work through an app - Deutsche Telekom offers a secure environment for processing sensitive transactions like payments. It can also provide targeted support for the distribution of NFC-capable smartphones, while its services for corporate customers and partners complete the picture to ensure an end-to-end payment strategy.