Orange and T-Mobile sign with MasterCard for NFC mobile payments

As the UK mobile industry's plans for a mobile payments joint venture continue to hang in limbo, Everything Everywhere has revealed an 'exclusive' partnership with MasterCard.

Everything Everywhere, which operates the T-Mobile and Orange brands in the UK, has signed an five-year partnership deal with MasterCard to develop and provide mobile payments services.

According to the two companies, the first fruit of the "exclusive" deal, announced on Tuesday, will be a co-branded service that lets users top up their account, then make payments by swiping their phone on a reader in a store.

Mobile payments
Everything Everywhere has teamed up with MasterCard on a mobile-payments scheme. Image credit: Toby Wolpe/ZDNet

Orange has done this before through a partnership with Barclaycard , and all the UK operators except for Three have been trying for over a year to establish a joint venture , to allow the same sort of thing.

However, that joint venture is on hold. Three complained that it was being unfairly shut out — it said a year ago that the first it heard of the venture was through the press — and European antitrust authorities are now examining the scheme .

The European Commission has until 19 September to decide whether to intervene (the original deadline was Monday, but that was extended in May), so in the meantime Everything Everywhere is clearly forging ahead on its own, as is Vodafone with Visa.

"As the use of cash continues to decline, we will be able to provide Everything Everywhere's 27 million customers with an attractive range of new payment services backed by the processing power and security of MasterCard," MasterCard UK and Ireland chief Marion King said in a statement.

The pre-paid nature of the first anticipated product suggests it will be used for smaller payments.

However, King also suggested that, "as the sophistication of smartphones continues to evolve, and the mobile payments ecosystem starts to open up… people will use their mobile phones in lieu of a traditional wallet and start making higher end purchases, such as white goods or even cars, all through their phones."

The shift to mobile is a very big deal for the payments industry . Not only can people pay using near-field communications (NFC), the contactless technology being used in the deal announced today, but companies such as Square and iZettle are racing to get merchants using their little card-readers, which can plug straight into the vendor's smartphone and remove the need for bulky and pricey point-of-sale equipment.

Banks are also trying to innovate with mobility. Barclays' Pingit app is a notable example, allowing customers to transfer money internationally without paying fees.