The UK's leading banks and mobile phone operators last week unveiled a service that will allow customers to top up pre-paid mobile phone accounts via automatic teller machines.
The top-up facility will appear as another option on the ATM screen, with amounts debited from the customer's bank account in the same way as a cash withdrawal.
Analysts said that although the top-up service has resulted from co-operation between the banks and telecoms companies, the two sectors could be on a collision course, competing for the lucrative high-value payments market.
Customers of Vodafone and O2 will be able to top up their pay-as-you go accounts at ATMs connected to the Link cash machine network. Orange, T-Mobile and Virgin Mobile have also signed up for the service. Of the banks, only the Co-operative is currently connected to the service but other banks are in discussions about joining the scheme, Link said.
The plans for a mobile top-up service over the ATM network were first revealed by Computer Weekly in March 2002. Although a relatively basic form of mobile commerce - the Bank of Ireland has been using the service for more than three years - it is one of the first high-profile examples of co-operation between UK mobile phone operators and banks.
The mobile top-up facility requires links between the banks and mobile phone providers -using message standards - to authorise transactions. The mobile operators' networks are already connected through an electronic transaction protocol for billing and accounts systems.
Analysts said one reason for the slow progress of mobile payment services has been the uneasy relationship between banks and telecoms companies.
"Banks and telecoms companies have a somewhat strange relationship," said Duncan Brown, consulting director at analyst firm Ovum. "Telecoms companies use their own networks for micro-payments, so the risk is quite low. Banks have more or less abdicated their share of micro-payments and they have failed miserably with Mondex [the smartcard alternative to cash which failed to take-off in the mid-1990s]."
Brown said telecos could also decide to offer high-value payment processing services for debit and credit cards. "There is nothing different about processing low-value transactions than high-value transactions," he said.
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- Customers enter their usual Pin at the ATM; select the top-up option and operator; enter the top-up payment value and type in their mobile phone number
- Banks are linked to the mobile phone companies via the Link network and messaging standards
- Vodafone, 02 and the Co-operative Bank are already on board, with other banks and operators lined up to follow.