EU edges closer to mobile phone payments


An agreement between two major industry players has brought Europe a step closer to using mobile phone technology for direct payments.

The European Payments Council (EPC), the decision-making body of the European payments industry, and GlobalPlatform, the smart card infrastructure industry association and standards leader, yesterday (18 May) signed an agreement to work together to promote smart card technologies. 

The technology is already in use in other jurisdictions, but has yet to be adopted on an EU-wide scale. France has initiated trails where some retailers are installing terminals to facilitate contactless payments. 

Yesterday’s agreement will facilitate the quick implementation of smart cards, as GlobalPlatform will help provide standardisation for the payments industry’s smart card payment offerings. This will allow the two organisations to work together to contribute to a “cohesive ecosystem”, according to senior EPC official Dag-Inge Flatraaker. 

To develop a common payment infrastructure and standards within the euro zone, European banks and credit associations set up the EPC in June 2002. The European Commission has already confirmed its support for the industry towards the integration of infrastructures (EURACTIV 23/07/08). 

The EPC collaborates with the Commission on the Single European Payments Area (SEPA), which seeks to remove regulatory and administrative obstacles and thus reduce the cost of cross-border payments for consumers. 

The EU executive’s e-Money Directive was adopted by the European Parliament last month (EURACTIV 27/04/09). The new directive “will make it easier for electronic money institutions engaged in other business activities, such as telecommunications, to develop innovative services into payments market,” said a Commission spokesperson. 

"Collaboration across industry associations is key to establishing such a usable and secure infrastructure," said GlobalPlatform chair Sebastian Tormos, welcoming the agreement. 

"We clearly see the importance of working together with GlobalPlatform in the contactless domain in order to facilitate the implementation of our roadmap" for mobile payment services, said Dag-Inge Flatraaker, who chairs the European Payment Council's  M-channel group. 

He added that "a scalable and sustainable mobile contactless ecosystem can best be realised by standardising how organisations delivering a solution to market interact". 

Internal Market Commissioner Charlie McCreevy said after the European Parliament's adoption of the e-Money Directive that the directive, "alongside noteworthy efforts of the payments industry to develop SEPA products, will be crucial and timely step towards the completion of the single market for payments". 

The Irish commissioner added that the Cross-border Payment and e-Money Directives "will, together with the Payment Services Directive, complete the legal basis which is indispensable to provide clarity, certainty and to the market". 

Contactless payment via mobile phones is already possible in a number of countries around the world, with Japan and South Korea leading the way. 

In Europe, mobile phones are not yet used for payment in shops, although smart cards have already been issued by banks, and some shops are already equipped with terminals to read them. 

The smart card industry association, GlobalPlatform, aims to establish, maintain and drive the adoption of specifications to enable an open and interoperable infrastructure for smart cards, devices and systems. 

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