Norwegian mobile payment joint venture Strex admits that emerging rivals Apple and Samsung will intensify competition in the m-payment market but insists that it is well placed to succeed.

Formed by Telenor, TeliaSonera and Tele2, Strex is in the process of transforming itself from a popular SMS payment provider that enables consumers to carry out transactions linked to their phone bill – or debited from their prepay credit – into a fully-fledged m-payment service that supports transactions carried out via the Web and apps, and can be funded by bank accounts and credit cards in addition to carrier billing.

Strex is well established as an SMS payment provider, handling 40 million transactions per year. It is hoping to repeat that success with its new service; however, some big names are looking to muscle in.

Apple and Samsung "are big competitors," admitted Hege Kosberg, who was named CEO of Strex late last year.

Indeed, Apple has launched Apple Pay in the U.S., which enables customers to pay via their smartphone using near field communications (NFC). Meanwhile, Samsung earlier this week unveiled Samsung Pay, an offering similar to Apple's but which relies on a different contactless technology that works with a broader base of merchants.

Nonetheless, Strex has some key advantages, Kosberg told Total Telecom at Mobile World Congress this week.

"We are local, we have a close relationship with our customers who are already familiar with SMS payment," she said.

Strex's SMS payment service also enjoys strong support from merchants, and Kosberg is confident this can be replicated with its new services.

In addition, as a joint venture backed by Norway's three major operators, Strex can reach out to 92% of the country's mobile customers, she noted.

Bringing a large base of merchants and mobile users together "gives you huge reach," added Jonathan Kaftzan, director of product marketing for mobile financial services at Amdocs, which is providing the platform and managed services to Strex.

To be successful, he said a prospective m-payment provider must address four challenges: driving user adoption and usage; building an ecosystem of merchants; running a low-cost, profitable operation; and ensuring regulatory compliance.

"No matter where you are in the world, you cannot leave one of those challenges to one side, and say 'I'll do it later'," Kaftzan said.

Strex is focusing on Norway for now, but given that its parents have multinational footprints, the company is keeping its options open.

"Our owners are based across Scandinavia, so there's potential," Kosberg said.

Total Telecom