The European Commission has given its unconditional approval for the creation of a mobile wallets joint venture between UK mobile operators Vodafone, O2 and Everything Everywhere, known as “Project Oscar”.
The EC said that its preliminary investigation had indicated potential competition concerns in the nascent mobile payments market. Following an in-depth investigation, however, the Commission concluded that the joint venture is not likely to impede competition in Europe.
“Mobile commerce is a nascent sector that may radically change the consumer buying experience in the next few years,” said Joaquín Almunia, Commission Vice President in charge of Competition policy.
“The Commission is keen on promoting innovation in this area and ensuring that the markets remain open so that a number of competing solutions can emerge without undue obstacles, to the benefit of consumers.”
The aim of Project Oscar is to allow consumers to make purchases in a wide range of shops via their phone using Near-Field Communication (NFC) technology.
Until now, individual partnerships between network operators and banks have created closed-loop systems, so that a consumer that signs up to use NFC with a particular operator and a particular bank cannot use the service in a shop with terminals provided by a different operator.
Project Oscar aims to solve this issue by offering an integrated mobile payment system that will be run independently and open to all. It will also provide various mobile commerce services to businesses, including mobile marketing and associated data analytics services.
Project Oscar mirrors a similar join venture in the United States known as Isis.
Vodafone, O2 and Everything Everywhere welcomed the EC's approval, claiming that the joint venture will remove a number of the barriers that currently inhibit growth and create a single channel with access to millions of UK consumers at launch.
“Through the solution offered by the JV, businesses will be able to connect once in order to offer a wide variety of mobile wallet services – including payment and loyalty cards – to millions of consumers on the majority of handsets, operating systems and mobile operators,” the companies said in a statement.
Project Oscar has faced fierce opposition from Three, the smallest UK operator, which claims to have been frozen out of the process. However, the company was restrained in its response to today's news, stating that it would “continue to monitor developments closely”.
“We look forward to the invitation to become a customer of the joint venture on the same terms as all participating UK mobile operators,” a company spokesperson told the BBC.
Commenting on the news, Richard Britton, managing director of CloudSense, said the decision by the EC to give the green light to Project Oscar is good news for telecom operators, the mobile payments industry and ultimately the consumer.
However, he warned that one factor crucial to Project Oscar’s success is that the operators can quickly integrate the necessary technology into their back office operations and deliver a seamless mobile experience for customers.
“This will be an essential element in persuading interested retailers and banks to sign up to the new platform. Before they commit fully, partners will want to be certain that Project Oscar offers the functionality and convenience that will benefit their customers,” said Britton.