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Telecom Italia to enable mobile payments

Starting next year, Telecom Italia customers will be able to use their mobile phones to buy a range of goods and services, from train, bus, theater, concert and ski-lift tickets to parking and hotel rooms.

Telecom Italia is partnering with Movincom, the Italian consortium of companies and service providers for the promotion of mobile retail, to let the carrier?s customers use their mobile phones to make purchases. Telecom Italia is building an ad-hoc application into its latest SIM cards to enable mobile payments via Movincom.

?Most mobile payments in Europe have so far focused on digital goods such as games and ringtones,? said Thomas Husson, Paris-based senior analyst at Forrester Research Inc. ?This initiative is an excellent transition to move the market towards a next step.

?Indeed, ticketing is one of the goods and services that consumers are more likely to buy on their mobile phones,? he said. ?It can really add value and convenience to consumers.?

Telecom Italia has 32.6 million wireless subscribers, making it the No. 1 carrier in Italy.

The carrier is also trialing contactless payments using near field communications (NFC) in partnership with ATM, the transportation authority for the city of Milan.

The Movincom Consortium currently has more than 650 operational services on board in various different market sectors.

According to Forrester technographics data, up to 35 percent of Italian adults who access the Internet are interested in using their mobile phones to pay for public transportation or parking, versus a European average of 23 percent.

?What is critical is to create an ecosystem where the various stakeholders can agree on a business model and work together to deliver the best possible user experience,? Mr. Husson said.

?In this regard, Movincom is federating many initiatives in the transport and ticketing industries in Italy and Telecom Italia was a natural partner as the Italian mobile leader,? he said.

Using the mobile payments application, Telecom Italia customers will be able to buy various goods and services from their mobile phones, making use of methods offered by banks who sign up to participate in the venture.

Using a SIM Application Toolkit (SAT) technology platform developed by Telecom Italia, this mobile commerce service authenticates the phone number from which each transaction originates and provides security features.

Specific menus integrated directly into the SIM card will guide customers through the process of making mobile purchases.

Orders placed for goods or services are dispatched via a text message generated automatically by the application.

The text message features the purchaser?s mobile phone number but no sensitive data about the selected method of payment.

The configuration-free service will be available on all mobile phones. It will be possible to update the service at any time as new goods and service providers are added.

?What is interesting here is that the solution is SIM-based and not NFC based,? Mr. Hussson said. ?It can thus be more mainstream, as there are very few NFC handsets available so far.

?I do believe NFC is a technology of choice but it will take several years to emerge,? he said.