O2 unveils mobile wallet

27 April 2012

The O2 Mobile Network Operator, Telefonica’s UK MNO, has launched its long promised mobile wallet offering peer-to-peer (P2P) text-based payments worth up to £500, debit card and cash on-boarding and various other functionality such as discounts from the more than 100 participating retailers in the m-wallet scheme, including Comet, Debenhams and Tesco and Sainsbury’s Direct online operations.

A Visa pre-paid card is included in O2 new m-wallet application for smartphones for online and high street shopping but there is not a mobile contactless payment (MCP) element to the launch as originally envisaged because the MNO said it did not feel the contactless acceptance infrastructure was yet in place. There are many Near Field Communication (NFC) enabled readers in UK chain stores, such as Eat, McDonalds and elsewhere, but usage figures have so far been quite low.

The managing director at O2 Money, James Le Brocq, commented that he believes the m-wallet, “will transform the way people manage their finances and spend money". Le Brocq also maintains that the MCP element to the scheme will be added in at a later date, alongside the ability to top-up mobile airtime, buy train tickets and other functionality.

Technology partners involved in the pioneering launch of the UK m-wallet, which was originally intended to launch last year, include FIS, Intelligent Environments, Giesecke & Devrient, Cogenta, and Visa, alongside 250 in-house staff at O2. The MNO had applied for an e-money license last November to the Financial Services Authority and is launching its m-wallet under an interim e-money license from Gibraltar IDT Financial Services. O2 has had a personal finance unit since 2009 and previously worked with NatWest on early development projects before striking off on its own.

A recent YouGov survey of 2,3000 adults in the UK, commissioned by another of O2’s partner technology firms, Intelligent Environments, and carried out in late April purports to show that the demand for mobile payments in the UK is strong, with 29% of British smartphone owners saying they would prefer it to cash or cards for purchases of under £20. The figure rises to 41% among the 18-24 year old age group, although this is still a minority of respondents and it appears that while people are interested a lot of work still needs to be done to persuade consumers to adopt technology wholesale.

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development