M-payment: Partnership between Telefónica and Visa Europe

• Telefónica Digital (new division of Telefónica) has entered a partnership with Visa Europe with m payment deployments in view for its O2 and Movistar subsidiaries.

• This strategic agreement is explicitly perceived as a co investment in developing innovative products. Test phases should include solutions such as mobile wallet, NFC payments or merchant and acquirer offers, but also Visa card issuing by Telefónica.

• This cooperation based on common grounds (in the UK and in Ireland more precisely), officialises their joint commitment and expends it to the entire EU market.

Source: Visa press release

• Telefónica already proposes O2 Wallet in the UK (see May 2012 Insight) and is getting ready for new rollouts as shown by this agreement. Telefónica also intends to rely on other partnerships to craft a full range of mobile services (with Sybase and G&D for example).

• The mobile carrier has also started working with Google, Microsoft, RiM and Facebook in the beginning of July on carrier-billing m-payment. Facebook has integrated their payment method into its platform, Google and RIM will add this option on their respective stores and Microsoft should set it as default option for Telefónica customers making purchases on its Windows Phone Marketplace.

• Visa has already taken likewise steps in the mobile payment sector with Vodafone and Telefónica for its part worked with MasterCard on founding Wanda in South America in the end of f2011 (see March 2012 Insight). As the mobile payment sector grows, various strategic partnerships are being set up, and mobile carriers have interestingly started working with card networks. This announcement also coincides with the recent partnership between Deutsche Telekom (T-Mobile) and MasterCard on the European m-payment market (see this month: "Partnership between MasterCard and Deutsche Telekom").