| WARSAW, July 4
WARSAW, July 4 Six of Poland's top banks have
teamed up to create a payment system using mobile phones which
they believe could grow to rival credit cards and serve as a
model for the rest of Europe.
The banks, including the country's biggest lender PKO BP
, said on Thursday the project was the first in Europe
to be backed by financial institutions, which they believe could
encourage take-up among customers and retailers compared with
similar ventures set up by mobile phone firms and store groups.
If successful, it could challenge the business model of
credit card companies such as MasterCard and Visa
which mainly rely on customers carrying their branded credit
cards to make payments.
Looking to tap rapid growth in smartphones, the system will
allow customers with a smartphone application (app) to generate
a one-time transaction code to pay for merchandise from a
retailer with a special payment terminal.
"This will be a more competitive system compared to the
credit card system," said Boguslaw Kott, CEO of Bank Millennium
, a unit of Portugal's Millennium bcp.
"The credit card system will probably be put under a
question mark in the future," he forecast.
MasterCard and Visa are not standing still, however,
experimenting with their own mobile payments and virtual wallets
in a bid to head off competition from technology companies and
others in the expanding digital payment arena.
The system in Poland, which the banks want to have in place
by the Christmas shopping season, will be based on a platform
introduced by PKO BP, which also controls one of the country's
top payment companies, eService.
Other banks taking part in the project are Alior Bank
, Banco Santander's Bank Zachodni WBK
, Commerzbank's BRE Bank and ING
Group's ING Bank Slaski.
Combined the banks have 16 million clients, or 70 percent of
the Polish market.
Poland's payment market is dominated by MasterCard and Visa,
although many smaller merchants still only accept cash because
of the charges they must pay. Poland's parliament is working on
a bill that would mandate their reduction.
"It's clear the role of credit cards and the duopoly will
weaken, which is not even the effect of high charges but mainly
by technological innovation," said Michal Sobolewski, analyst at
brokerage IDM SA.
"The one who comes up with a new, widely accepted mobile
payment system will get the first mover premium and will be able
to dictate the conditions," he said.
PKO estimates the value of non-cash transactions last year
at 153 billion zlotys ($46 billion), including 85 billion zlotys
in credit card payments.