This banking service rewards loyal customers with free mobile data

In a world of near-zero in terest rates, phone carrier Telefonica SA is starting a new mobile banking service that skips the cash and re wards loyal customers with a currency it has in abundance: data for smartphones.
Telefonica Deutschland, the Spanish carrier's German unit, next week will introduce “O2 Banking,“ according to two people with knowledge of the information. The more of ten customers use the Master Card included in the deal, the more free wireless data they'll receive.The accounts will be serviced by Fidor Bank AG.
While Telefonica's appli cation will be the first mobile banking service from a phone carrier, others have long offe red banking in the developing world, especially in Africa. Kenya-based Safaricom in 2007 introduced a service called M-Pesa that now handles more than $50 billion in transactions annually .
In Europe, other carriers faced with scant growth in their home markets are exploring similar offerings. Orange SA, which provides financial services in Poland and Africa, bought 65% of the banking unit of Groupama SA in April. It expects to introduce financial services for mobile users in France next year.

“European telecom operators are trying to move beyond being a dumb pipe by building an ecosystem to sell additional services,“ said Alex Wisch, an analyst at Bloomberg Intelligence.
While Telefonica hasn't said anything about broader plans for banking, it has close ties to Spanish banks Banco Bilbao Vizcaya Argentaria SA, or BBVA, and CaixaBank SA, which between them own about 11% of the carrier.
Telefonica may have a hard time making much mo hard time making much money from mobile banking in Germany because it has “lesscorporate and more younger, cost-sensitive customers“ than its main competitors in the country , Deutsche Telekom AG and Vodafone Group Plc, said Leonhard Bayer, an analyst at Hauck & Aufhaeuser in Hamburg.