Google's Relationship with Telco Mobile Payments is Complicated

To say Google has a complicated relationship with mobile service providers in the mobile wallet or mobile payments space is an understatement. Google both competes directly with some efforts and also appears to be looking to partner with others.

Deutsche Telekom is in discussions with Google, credit-card networks and banks about becoming partners to Deutsche Telekom’s new mobile payment system, Business Week reports.

Deutsche Telekom already had said it is working with MasterCard in Europe, allowing the Deutsche Telekom mobile payment system to use point of sale terminals accepting Mastercard payments.

So far, the talks are exploratory. “We’re talking to other players in the market, and even a cooperation with Google is theoretically possible,” said Thomas Kiessling, Deutsche Telekom chief product and innovation officer.

In principle, Google could supply credentials and loyalty features, as Google Wallet already works with Mastercard payment terminals and systems.

Separately, Google’s Save to Wallet APIs allow developers to add features allowing visitors to bank and merchant websites to save payment cards and offers to Google Wallet.

The “Save to Wallet API for Payment Cards” enables banks to integrate any credit or signature debit card into Google Wallet in a relatively simple manner. Google provides card-issuing banks with two options: 1) a “no integration” option that allows banks to provide us card art, and co-market Google Wallet, or 2) a light integration option, which enables banks to push cards directly from their websites into Google Wallet, with user consent.

The “Save to Wallet API for Offers” enables merchants to publish offers that can be saved to Google Wallet as well. Offers can be redeemed by consumers using a mobile device either using SingleTap NFC at the point of sale, or by showing and scanning the offer during checkout.  

The benefit of the API to the merchant is that website visitors easily can save an offer from the retailer’s website so that they have it with them when they visit your store.  Google Wallet will also remind customers to use offers before they expire.

But Google’s current relationship to telco-owned mobile wallet or mobile payment systems is complicated. In the U.S. market, Google Wallet faces Isis, the consortium owned by AT&T, Verizon Wireless and T-Mobile USA, as a competitor.

In the United Kingdom, Google and PayPal both have warned that a proposed joint venture between Britain’s five biggest mobile service providers could stifle growth of the nascent market, the Financial Times reports.

The “Project Oscar” mobile payments initiative involves Vodafone, Telefónica’s O2 and Everything Everywhere, the merged U.K. businesses of Deutsche Telekom and France Télécom.

On the other hand, Google obviously is interested in mobile partners, as it has been working with Sprint as part of its U.S. Google Wallet operations.

Separately, China Telecom also has announced a new mobile banking service more oriented towards mobile bill payment and money transfers, rather than retail payments.

Deutsche Telekom aims to make mobile payments a reality for Deutsche Telekom’s 93 million mobile customers across Europe, beginning in Poland in 2012.

In Germany, Deutsche Telekom will conduct trials using tags and cards rather than NFC-capable (near field communications) devices, a simple solution to the relative lack of NFC devices in the installed base.

Deutsche Telekom will issue the MasterCard products via its subsidiary company ClickandBuy, which has the mandatory “e-money license” required to operate a mobile payment system.