MNOs hedge their bets with own credit cards

Much has been written – at least here on telemedia360 – about how mobile billing is seeing a shift from the poor payouts of operator billing towards alternative, credit and debit card billing mechanics which offer better pay-outs and, thanks to the rich inventiveness of the telemedia billing industry, a raft of flexible services.

All this means that, despite operator billing still being the predominant payment mechanism, the writing is on the wall for MNO control of the space.

So what do the MNOs do? Well, to cover all bases they are launching credit cards of their own. In the UK O2 has rolled one out and now Telekom Austria’s mobile arm, mobilkom Austria, has done the same.

It has long been mooted that operators would enter the financial services world. For many years they were so cash rich, thanks to their pre-pay services, that they rivalled banks for capitalisation (until of course we found out that banks were grossly under capitalised and were recklessly gambling with what money they did have – but that’s another story).

MNOs also had a huge – and profitable – FX (foreign exchange) business. Thanks to high roaming rates and the growing move to cross border services, they made tidy profits on simply moving money around.

All this made them look, to all intents and purposes like banks. Fast forward five years and banking is a dirty word and the idea of MNOs moving from their core business to join the throng of bankers is largely pooh-poohed. Its non -core and banking is now a dirty word.

But, launching credit card does leverage MNOs banking like operations, opens up a new revenue stream and, perhaps most importantly, means that, as credit card billing eats into operator billing, the MNOs still get a slice of the action.

There is other good news for telcos in the banking space also. At the Sibos convention in Hong Kong this week, strategists from Forrester Research, Microsoft and London Business School all painted a picture of tomorrow’s retall banking sector that relied almost entirely on delivery through wireless channels – that’s networks, wifi, wimax etc – and that relied on contactless payments and wireless web.

I’ll spare you the real boring details, but suffice to say the vision of the future is that you will travel in an electric taxi – paying automatically and contactlessly as you get out – enter the mall, where there will be a ‘bank space’ that will automatically recognise you and start pumping data to your handset and screens around you. You will then interact through you rmobile bah blah la did ah.

It all looks wonderful. But its Microsoft, so it probably won’t work very well. It is also mobile, so will cost a bomb and/or not work very well. Anyhoo, its an interesting idea.