GSM Association Aims For Global Point Of Sale Purchases by Mobile Phone

Fourteen operators join initiative to develop global mobile payment enabled by contactless/NFC technology

13th February 2007 - Barcelona, Spain: The worldwide use of mobile phones for payments at point of sale is the aim of a new initiative announced today by the GSM Association (GSMA), the global trade organization for mobile operators.

The ‘Pay-Buy Mobile’ initiative is a natural progression for the industry, following the GSMA’s program - announced last year - to define a common global approach to enabling Near Field Communications (NFC), the technology used to link mobile devices with payment and contactless systems. By embedding mobile contactless services, such as credit and debit payments, in the SIM card the mobile industry will extend the role of mobile phones in customers’ everyday lives.

Fourteen mobile operators are participating in the ‘Pay-Buy Mobile’ initiative, which seeks to define a common global experience for mobile phone payments, on which seamlessly interoperable services will be provided.

The fourteen operators, representing more than 900 million mobile users, are Cingular Wireless, now part of the new AT&T; China Mobile; KALL; KTF; MCI; MTN; NTT DoCoMo; Rogers Wireless; Smart Communications; Telenor, TeliaSonera; Telecom Italia; Turkcell, and Vimpelcom.

"The mobile phone is now becoming an essential life management tool for mobile users," said Rob Conway, CEO of the GSM Association. "By bringing payment capability into the device, users will benefit from the ability to purchase items in a secure and convenient way from the comfort of their own mobile phones, hailing an end to bulky wallets full of notes and coins."

Whilst various forms of mobile payment trials and services have been announced, this is the first truly global approach to facilitate payment by mobile. Secure, transparent mobile payments will be made using a SIM / Universal Integrated Circuit Card (UICC) card in mobile phones plus contactless/NFC technology. The result will be an interoperable and transparent service for mobile customers, financials institutions and the banks.

This approach will further accelerate the efforts of the major credit card companies, which developed the specifications to ensure global interoperability between chip cards and Point of Sales (POS) terminals, regardless of manufacturer, the financial institution and location of transaction. The GSMA intends to work closely with leading financial intermediaries to provide the transaction solutions.

The first phase of the GSMA initiative will begin with a business model analysis followed by an end-to-end trial in Korea later this year. The trial will be led by KTF and will include all key participants in the value chain, from banks and credit card providers to retail organizations and handset manufacturers. LG Electronics will provide handsets for this initial trial in Korea. KTF will share the results of its trial with the GSMA’s operator community as part of the program. Following this, similar trials will be deployed involving other operators and financial institutions.

Mobile phone based transactions are already becoming commonplace in South Korea, where there are already more than 12 million mobile payment enabled handsets in circulation, with 80,000 terminal payment machines in shops, restaurants and cafes.