Home Site map eNews direct FAQs Contact us





Press Kit

Press Releases

Fast fact:
'The European prepaid mobile market is worth €35bn Euros in revenues to mobile operators'

Simpay Pulls the Plug on Pan-European Payments
Source : Stream Magazine

Stream Magazine (1 September 2005)

Simpay, the pan-European mobile payments platform established in 2003 to address the billing and payment issues faced by the mobile market, has disbanded and will no longer pursue its activities on a Europe-wide basis. Its owners, a consortium of the mobile operators Amena, Orange, Proximus, Telfonica Moviles and Vodafone, can still use the technology for national initiatives but Simpay’s dream of becoming the mobile equivalent of Visa or Mastercard lies in tatters. The final straw, according to market rumour, was the decision by T-Mobile International to withdraw from the scheme. In a separate announcement, First Data, the parent company of Encorus, Simpay’s technology provider, has stated that it has decided to write off its investment in Encorus.

Although Simpay’s owners have not publicly detailed the reasons for their decision to disband, analyst firm Gartner attributes its failure to four factors: Simpay was originally supposed to launch in 2004 but implementation delays have strengthened potential competitors' hands; the members are likely to have underestimated the challenges of a Europe-wide payment system; the cost of launching a consumer payment brand may have been unattractive — especially to T-Mobile which is undergoing a major cost reduction programme; and local operator resistance to the scheme.

News of Simpay’s demise has had a mixed reception in the market. "When Simpay started out it was going to be a trusted mark [for mobile payments] in the over €10 range but then changed its approach to offering payment services in the $4 range," said Ashley Ward, chief executive of Upaid. "For me, with $4-8 transactions there's nothing operators can't do already through premium SMS or reverse billing. Where was the value add apart from being pan-European? The cost of using Simpay would have been similar to that of using the operators for billing so Simpay didn’t bring anything to the market. I'm not overjoyed by its departure — the intention of Simpay was of the highest integrity and it has been great for the development of the market."

Shortsighted decision

Gartner also views the decision to abandon a Europe-wide Simpay rollout as a shortsighted one. According to its analysts Nick Jones and Martin Gutberlet: "This move represents a lost opportunity, but it does not mean the end of European mobile commerce. We believe that Europe's mobile payment systems will remain fragmented and that national payment solutions driven by local requirements will dominate. The losers from this decision will be consumers and merchants, who would have benefited from simplicity, consistency and interoperability. The winners will be potential competitors, such as PayPal, payment processors, aggregators and operators' "on portal" payment systems."

Atte Miettinen, chief marketing officer of End2End Mobile, added that: "This is simply an example of the challenges in creating industry standards and nothing more. This will simply mean that operators in each country need to come together to create an alternative. That's already happening in Germany where a National Roundtable M-Payments initiative has started. In addition, many countries already have initiatives such as Gallerie in France and Mobipay [which will continue to use Simpay technology] in Spain."

Terms of use
Privacy statement
Copyright 2003 Upaid Systems