A perspective on Mobile Payments in Europe

Europe’s venture into mobile banking is characterised by many small initiatives that all failed. A case in point is the example of small Dutch company Global Payways with a product called Moxmo launched during 2003 with a mild take-up in the Netherlands. During the collapse of Paybox, Global Payways acquired the subscriber base of Paybox in Germany. This small company was soon in financial difficulties and had to disband services within six months of having taken over the larger subscription base. (Many reference, but read the following blog.)

Soon afterwards major mobile operators announced the Simpay alliance. Simpay endeavoured to provide a common payment platform between Vodafone, T-systems, Telefonica and Orange. While the European industry waited, Simpay had the central stage for three years and produced… nothing. This fiasco had a lasting impact on the European mobile payment industry.

A company that is quite visible at the moment is a company called Monitise. An initiative started by Morse with a Java based service on top of the ATM network is now being deployed by 1^st Direct, HSBC and Alliance & Leicester. The company is very visible (because of a large marketing budget?) and is making big headway from a brand building perspective, but the technology offer little functionality to the subscriber. Recently Monitise listed on the LSE raising a substantial amount to fund the current burn-rate. Another company with a similar profile is the Finnish company called Meridea. With backing from Nokia and Accenture this company was the technology behind amongst others Standard Chartered mobile banking initiative. Unfortunately it closed its doors a few months ago when they ran out of funds.

A noteworthy deployment is the mobile payment solution supported by Banksys in Belgium. Banksys is the central ATM and POS switching company owned by the major banks. Banksys recently announced a SIM card based solution supported by all the major mobile operators that allows subscribers to make payments from their existing bank cards utilising the mobile phone.

The deployment of Paybox in Austria is still operational today and very successful. The service is available on more than one network, provides excellent functionality and utility and is used by close to half a million people on a regular basis. (This is quite a big coverage considering the size of Vienna where most of the subscriber services are available). The service is claimed to be profitable and is one of the best examples of a mobile payment solution that ultimately became successful because of dedication of management.