The deal includes cooperation in areas such as mobile wallet, contactless payments (NFC), acquirer services for mobile point of sale, and merchant offers.
The agreement builds on Telefónica and Visa Europe's existing relationship in markets such as the United Kingdom and Ireland, establishing Visa Europe as Telefónica's preferred partner for the issuance of branded payments cards and the development of related mobile payment services, Visa Europe says.
Separately, MasterCard and Telefónica have a joint venture, called “Wanda,”created to lead the development of mobile financial solutions in 12 markets in Latin America.
Wanda will provide mobile payment solutions to the over 87 million Movistar customers in the 12 markets where it will operate. These mobile payment services will be linked to a mobile wallet or prepaid account that will allow for money transfers, mobile airtime reload, bill payment and retail purchases, among other services.
Mobile commerce is a key focus area of Telefónica's new Digital unit which was formed to drive business opportunities within the digital space. Within Europe, Telefónica has launched a mobile wallet service to customers in the UK and is working to launch mobile wallets across its other operating businesses.
The deal highlights one key aspect of growth strategy for tier-one European mobile service providers. The problem is that, if you are an executive leading a firm earning a score or two billion dollars a year, and you think you might have to replace perhaps half of that revenue over perhaps a decade's time, you really need big new sources to offset the loss of revenue of that magnitude.
And, as it turns out, at the moment there are just a handful of revenue generators theoretically capable of generating billions of dollars worth of incremental revenue each year, for a single service provider. Those opportunities are said to include mobile banking operations, in a broad sense; mobile advertising and machine-to-machine mobile services.
After that, the potential list of new businesses fall off fairly dramatically, in terms of revenue opportunity.
That is why Telefónica Digital's joint venture with Visa Europe is so important.
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