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Dutch delay wireless wallets: T-Mobile waves, doesn't pay

NFC rollout pushed back

Internet Security Threat Report 2014

The Dutch consortium which promised to deliver NFC payments to the Netherlands in 2012 will now deliver in 2013, and without T-Mobile, but it's the EU's fault.

The Dutch will spend another year getting EU approval for the planned joint venture, a body comprised of network operators and banks to which ultimate authority for NFC payments in the Netherlands will be ceded. But in the meantime T-Mobile has decided to leave the heavy lifting to others.

T-Mobile was one of the original six, which also included Vodafone and KPN on the operator side, with Rabobank, ABN Amro and ING making up the banking component. The lack of proximity payment infrastructure in the Netherlands has prompted T-Mobile to re-examine the figures and decide that it is better off out of the deal for the moment.

The plan is for the new body to invest heavily in creating that infrastructure, and make the money back on the transaction fees, but T-Mobile Netherlands told NFC Times that it wasn't sure the revenue would cover the required investment.

That's not to say that T-Mobile couldn't join the consortium later, but it won't be involved in the submission to the EU for approval, or the 2013 roll-out that should follow.

Most network operators around the world have given up on the idea of making money directly from proximity payments. In the US, the ISIS platform had that intention, but will now provide a single-point-of-contact for anyone wishing to deploy NFC applications, including companies like Visa and Mastercard (and banks), while the UK operators (with the notable exception of Three) have set up their own equivalent.

Outside the Netherlands, operators intend to make money running coupon schemes and selling advertising space, which is fine when banks are already committed to deploying proximity payment (or are already deploying them, as in the UK), but the Netherlands needs investment to get the infrastructure in place first.

Realising that investment is hard, and that the margins on proximity payments are very slim – which is why T-Mobile has pulled out – the other players still want to get proper EU approval to forestall and challenge on competition grounds, which pushes the project back by a year. ®

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