Distinction in travel journalism
Is independent travel journalism important to you?
Click here to keep it independent

29 Feb, 2012

Visa, Vodafone Deal in Bid to Dominate Mobile Payments Market

Barcelona, February 27, 2012 (Visa Media Release) — Vodafone and Visa today announced a worldwide partnership to enable consumers to pay for goods and services using their mobile phones instead of coins and banknotes.

The companies will work together to develop a Vodafone-branded proposition that will be offered to consumers across Vodafone’s 398-million customer base in more than 30 countries across five continents, enabled by Visa’s outstanding payment network, product suite and brand. The partnership – claimed to be the largest of its kind between a global payment network and mobile operator – will bring Visa payment functionality to consumers around the world.

Editor’s Comment

This Visa-Vodafone Press release did not say a word about what recourse card-holders, customers and vendors would have in case the technology malfunctions or gets hacked.

I suspect this will prove to be a monumental flop. In an age when hacking and cyber-criminality is widespread, this is one “toy” that may prove to be not worth the risk.

The new Vodafone mobile payment proposition will be based on the Visa prepaid account and offered to consumers in partnership with Visa Issuers. The service will be launched in Germany, the Netherlands, Spain, Turkey, and the UK, starting in the coming financial year. Other countries within Vodafone’s global portfolio will follow.

In addition to the Vodafone-branded stored value account inside the mobile wallet, Vodafone and Visa will work together to enable Visa Issuers for mobile payments globally. The platform will be open to all partners of all relevant industries, including financial institutions, retailers, transport and utility companies to host their services within an innovative new Vodafone mobile wallet.

Vittorio Colao, Group Chief Executive Officer of Vodafone, said: “The Vodafone mobile wallet represents the next stage of the smartphone revolution. It offers our customers the speed, simplicity and convenience of managing their everyday transactions with a single wave or tap of their smartphone, using innovative and reliable services developed by Vodafone and Visa – technology and providers they can trust. Our mobile wallet will be open to any service provider and we are committed to enable all partners to provide our joint customers the richest service portfolio possible.”

In developed countries across Europe, North America and Australia, with a mature infrastructure for electronic payments, users of the Vodafone stored value account will be able to make purchases at the-point-of sale using Near Field Communications (NFC) enabled smartphones equipped with Visa payWave for mobile, Visa’s mobile payment technology. By simply waving their smartphone in front of a payment terminal, consumers will be able to make every day purchases such as bus and train tickets, newspapers, magazines or a morning coffee. Consumers will also be able to make high value purchases securely using a passcode.

Peter Ayliffe, CEO of Visa Europe, said: “Our partnership with Vodafone represents a huge stride forward for mobile payments. Visa’s future of payments initiative is more than just a promise: these services are real, tangible and coming to the mainstream consumer market in the very near future. Any Visa Issuer across these key markets will be able to work with Visa and Vodafone to enable mobile payments for their customers.”

“The convergence of global payment networks, such as VisaNet, with mobile telecommunication networks, such as Vodafone, has the potential to transform the way people pay and get paid the world over,” said John Partridge, President, Visa Inc. “Visa’s relationship with Vodafone will assist financial institutions in both developed and developing countries to offer Visa-quality payments to new and existing account holders.”

Today’s agreement forms part of Vodafone’s broader mobile commerce strategy to provide consumers with a comprehensive mobile-based alternative to the cash and cards within their wallets and purses. Vodafone is in discussions with a large number of service providers – including banks, retailers, transport and utility companies, event organisers, smartphone application developers and advertisers – to host a broad range of services within a Vodafone “virtual” mobile wallet.

The Vodafone mobile wallet will use NFC technology to send encrypted data over short distances to enable secure transactions, with customer protection assured by the use of the latest secure SIM card and payments industry technology. In addition to stored value accounts, it will also hold loyalty scheme points and gift voucher credits, complementing and sometimes replacing a whole class of plastic cards in the customer’s wallet or purse.

All Vodafone mobile wallet services – including the service announced with Visa today – will be compatible with standards currently being ratified by the global mobile industry body, the GSM Association.