Innovation Offensive "Open Gateway": Mobile Operators Facilitate Online Payment Processes

A forward-looking cooperation among major German mobile network operators promises to significantly simplify online payments while making them more secure at the same time. The initiative "Open Gateway," announced by Telefónica, Vodafone, and Deutsche Telekom at the Mobile World Congress (MWC) in Barcelona for Germany, marks an important step in digital payment transactions. This international project, already involving 42 telecommunications providers worldwide, was launched in 2023. It offers developers the opportunity, through provided interfaces, to make their applications more effective. In particular, "Open Gateway" holds tremendous potential for financial service providers and online merchants: the previously common two-factor authentication could become obsolete with this service, without compromising security. The identification procedure during online shopping, where customers often have to release their payment process via SMS code, is significantly optimized by "Open Gateway." The new technology allows for the authenticity of the payment to be immediately confirmed through the network of mobile operators. Here, the verification is based on the match between the phone number registered on the customer's account and the number used for the internet connection. Personal customer data remains protected in this process. The three mobile telecom giants have teamed up with technology platform Vonage for the implementation of this project, whose first customer in Germany is the second-hand clothing marketplace Vinted. In addition to improvements in payment transactions, "Open Gateway" opens the door to further application possibilities. App developers benefit from standardized interfaces without having to adapt their services for different networks. Alfons Lösing, a manager at Telefónica Germany, emphasizes the significance of this innovation: With "Open Gateway," mobile network operators would unlock new business opportunities and accelerate digital innovation.