Infosys customer and product operations leader Olu Adegoke discusses the latest state of m-payments.

Eurocomms.com: Deutsche Telekom’s partnership with MasterCard is the latest tie-up between an operator and a financial services firm; how would you assess the mobile payments landscape in Europe currently?

Olu Adegoke: In many ways, Europe is still in the experimental phase when it comes to mobile payments.

While there are a large proportion of companies, including banks, technology vendors and retailers, establishing different payment ecosystems and forming partnerships, at the moment mobile payment is at the early stages of customer adoption.

Rather than committing to a single model, companies are instead experimenting with different dimensions, business strategies and technologies to find out which model provides the most economic benefit.

Who holds the balance of power in these m-payments partnerships in your opinion?

It is tough to say. Often, it is a collaborative model that is win-win for both banks and telcos.

While banks bring the regulatory compliance and inherent trust in handling consumer accounts, telcos bring distribution reach and technology infrastructure that can ensure quick and instant payments.

What is important is that partners ensure complete security in this ecosystem and deliver fraud-free transactions to the end consumer, building trust and satisfaction.

What security challenges exist, particularly as many partnerships tend to be pan-European?

Security is a major factor that decides adoption of mobile payments technology.

According to recent YouGov research in the UK, 68 per cent said they are concerned about fraud and security, while 52 per cent said they are concerned about viruses and malware that could steal account and payment data from phones. 

Concerns around security show why regulation is so important for the industry, helping to ensure that all security measures are standardised and a requirement across Europe.

How likely is it that mobile payments will become standardised?

One of the challenges in the European market is the roll out of multiple mobile payment solutions by different providers.

The risk of market fragmentation and multiple standards confusing the end consumer is very real.

Interoperable standards-based solutions that support various types of payments and currencies must be implemented to ensure mobile payments are able to be fully adopted in every region.

Steps to ensure this are already being taken across Europe, such as the UK’s Faster Payment Service initiative, which is working standardise the market and reduce all payment times between different banks' customer accounts from three working days to just a few hours. 

The suitability of various wireless technologies, such as Bluetooth, Infrared, RFID and NFC, in providing the required features in mobile payments are also yet to be conclusively proven, which is making standardisation difficult.

To have mobile payments as a transaction method for the long term, customers need to be provided with unified access to their accounts and cards for mobile payments instead of numerous applications – standardisation of technologies across multiple vendors will go a long way towards enabling this.

Often the demand for standardisation of regulations is driven by the market players and not political bodies.

This is likely to apply to mobile payments in Europe, with the combined pressure from financial service providers, banks, retailers, device manufactures, operators and technology players, forcing the change through.

What new security technology is available for operators looking to strengthen their m-payment solutions and address consumer fears?

For a long time, security was seen as a real barrier to the adoption of mobile payments.

Both banks and operators need to address consumers’ fears about security, and communicate their commitment to creating a safe and trusted mobile banking channel.

One of the key technologies that will enable this is Trusted Service Manager (TSM), a near field communication ecosystem that has a strong security capability as its code combinations can only be used for one transaction.

Mobile payment providers should also be open to using multiple TSM to manage various aspects of mobile payments, thus strengthening their security offerings.

In the long term, providers should also consider offerings from security software providers as they allow the implementation of defensive firewall against viruses.

Currently, the focus on ensuring customer experience is limiting the use of this technology, as security software can affect the processing power of devices.

In addition, implementation of appropriate authentication mechanisms such as multi-factor and adaptive schemes can ensure security breaches are minimised, if not completely avoided.

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