French Telecom Operators Join Forces on Mobile Payments

Bouygues Telecom, Orange and SFR have formed a new joint venture that will use cell phones to help make online payments in France safer, the operators said on Thursday.

The joint venture is called Buyster, and Atos Origin's Worldline subsidiary, which specializes in electronic payment services, has also joined to help make it a reality.

To use the upcoming service, users first need to register with Buyster, which enables a bank card to be linked to the user's cell phone number in a secure way, according to the companies. To make an online payment, users first enter their mobile phone number and password. They then receive a message with a one-time password that is entered on the website to finalize the transaction, a spokeswoman at Orange said.

The service will be free and available to cell phone users, irrespective of their operator. The launch is planned for the middle of 2011. So far, there are no short-term plans for a launch outside of France, the spokeswoman said.

Buyster is still in the process of being incorporated, and its status as a payment institution still hasn't been granted by the French central bank, Banque de France, it said.

Gradually, the mobile phone is taking a more central role in how transactions are secured, money transferred and goods paid for all over the world. The interest in payments from mobile phone service operators make sense, because they are hoping to find a new revenue source, according to Sandy Shen, research director in Gartner's Mobile Devices and Consumer Services group.

Using mobile phones to verify transactions may help appease consumer security concerns. However, the jury is still out on using the mobile phone to pay for goods. Operators have to prove there is a business case that makes sense for both retailers and consumers, Shen said.

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