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By Felicity Ussher, 27 July 2000 00:30

NEWS Deutsche Telekom (DT) is considering issuing its own electronic money, in the wake of a recent European Commission (EC) finance ruling. The E-Money Directive - passed last month by the European Union (EU) Council of Ministers - broadens the definition of banks to include "e-money institutions". It's a technical detail intended to bring all e-money services under the regulatory control of the European Central Bank. But it has received a great deal of interest from European telcos who may want to take advantage of the lucrative commissions made by credit card companies from e-retailers. A senior EC source commented: "Many major telcos have followed the proposals all the way through parliament. I would be very surprised if they did not get involved." DT confirmed yesterday that it is considering the possibility of issuing e-money. A spokesman commented: "It is a nice opportunity and we are testing it and discussing it internally." Dutch telco, KPN, confirmed that it too was considering this - amongst other options. Chris Leather, head of contracts at the Global Mobile Commerce Forum (GMCF), an industry body representing mobile phone companies, said telco services could turn the current model for online payments on its head . In a recent interview, he said: "Your call connection charge will be set at the price of the goods you are buying - online or at a vending machine - and merely making the call will complete your purchase. The item will then appear on your monthly phone bill, rather than your credit card." Precise details of the business model - such as how profits are divided between retailer and telco - are still being thrashed out. VISA, Mastercard and Amex also gained the right to offer their own money services, under the new directive. But a Mastercard spokesman commented: "We tend to work on behalf of our member banks so we wouldn't really be doing anything that excludes them." He added: "We believe any development in electronic payment services will remain account-based." DT and KPN are expected to make a decision within the next few months.