T-Mobile Launches M-Payments

Customers of Telecom Italia's mobile unit TIM will soon be able to make payments using their mobile phones

February 12, 2008

2 Min Read

BARCELONA -- To mark its presence at the 3GSM World Congress, Telecom Italia is becoming a player in the world of micropayments via cellphones. Under the company’s strategy, TIM will be transforming mobile phones into electronic wallets and becoming a partner in the credit system.

Working closely with banks and finance companies, customers of Telecom Italia’s mobile unit TIM will soon be able to make payments simply and intuitively using their own cellphones.

Telecom Italia's mobile payment system leverages the phone's SIM card, a chip that now has sufficient memory to perform operations previously only possible for small computers. Customers who want to use payment services must first go to their bank and pair their cellphone number with a bank card (either a credit card or a prepay card). Once the card and phone have been paired, the customer can use the phone to make purchases, remotely manage their bank account, buy travel tickets (m-ticketing), and authorize payments from their bank account (m-banking).

In addition, TIM customers will be able to use their phones to connect to a special web page and manage their virtual "Mobile Wallet", where they store all of their credit cards. Once a digital version of a credit card has been stored on the SIM Card, it’s simply a matter of sending a text message to a special protected number to authorize payments, make purchases, or pay bills remotely. A personal code and the card PIN number are required to authorize transactions; for added security, these numbers can be managed directly from the mobile phone. Customers will also be able to download "virtual" versions of their loyalty cards (such as frequent flyer cards) and travel season tickets.

Via text message, customers can also request information on their latest Mobile Wallet transactions, credit card balances, and any bills that they have paid using their virtual cards. Telecom Italia expects to roll out mobile phone-based payment services using SIM cards and the mobile internet in 2008.

Telecom Italia has also begun trials of NFC (Near Field Communication) technology, which makes it possible to use mobile phones to pay for road tolls or public transport simply by approaching a POS, car park exit, public transport vehicle or even cinema. Cellphones and SIM cards equipped with this new application will appear next year.

Telecom Italia’s strategy for launching a mobile-phone based payment system relies on working closely with banks and credit card companies. Mobile payment is destined to become a surefire success on the Italian and international markets in the near future. Accountholders who use their mobile phones to make payments (and financial product holders) will appreciate the transparency of this system, which in no way changes their relationship with banks or card issuers.

Telecom Italia (TIM)

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