Even though France will be unveiling the EU's first payments via mobile SIM cards this year, so-called m-payments face an uncertain future as phone operators worry about their bottom lines and consumers wonder who will be tracking their payments.
EURACTIV spoke to Dag-Inge Flatraaker, a top Norwegian official who has been part of negotiations between Europe's banks and mobile phone operators to extend the EU's single rulebook on euro payments, the Single Euro Payments Area, to mobile phones.
M-payments mean that the SIM card in mobile handsets will carry the account details of credit and debit cards, allowing users to make "contactless" payments by hovering their phones over a terminal.
A French trial has shown some take-up of m-payments on public transport services but little success in shops, said Flatraaker.
"SEPA's main problem will be to build up a critical mass," argued Marc Rothemund, from the Brussels-based CEPS (Centre for European Policy Studies) think-tank.
The same will apply to m-payments as shops may be slow to provide the so-called contactless terminals for SIM payments, if there are not enough users to justify the investment.
Operators argue that it will also be difficult for them to generate new revenue in a mobile payments system that could be dominated by financial services firms.
On the other hand, consumers worry that m-payments will give network operators and IT firms new opportunities to study their commercial behaviour and to create targeted ads, like Google's Adsense, for example.
Banks will have full control over the information on customers' payments via their mobile phones but they will also be able to "leverage" mobile phone operators, argues Flatraaker.
However, m-payments will still need to comply with the same security rules, in order to protect online payments from hacking and phishing – emails masquerading as users' banks to steal account information, the top official admits.
The European Payments Council, the architects of SEPA, and the GSMA, the body representing the worldwide mobile communications industry, are still in the process of writing the security requirements for m-payments, says Flatraaker.
A potentially huge glitch in m-payments is the fact that stolen mobile phones could be used to make payments without the bank or the retailer noticing.
Flatraaker says it will be up to the customer to notify banks to shut down an account.