O2 launch eMoney based mobile wallet


O2 UK is to launch a mobile wallet app in the second half of this year, containing a suite of mobile payment options. Contactless payments, using NFC technology, will also be added to the operator’s m-payment mix this year – although O2 plans to launch the wallet app first.

“Contactless is just part and parcel of what the O2 wallet’s all about,” says James Le Brocq, head of O2’s financial services division. “I’m going to provision a load of services in the second half of this year which, as and when the time is right, we will also make contactless.”

At a briefing in London, Le Brocq says the operator envisages various services living in the mobile wallet app, including a shopping service for browsing and buying physical goods, mobile money transfer between individuals, and top-up options – initially for airtime but which he said could be extended to include bill payments and more in future – writes Natasha Lomas.

“Already we’re seeing very clear trends in the use of mobile phones for mobile commerce – to view retailers’ websites, to do price and product comparison… and increasingly, we’re seeing a trend towards the use of the mobile device as part and parcel of the payment process for the products you want to buy,” says Le Brocq.

“What we’d like to do is broaden that shopping opportunity for our customers by providing a shopping service through that mobile wallet so you can browse, you can product search… and you can actually effect a purchase through a mobile phone in a more convenient, easy-to-use manner than you might be able to today.”

At present, O2 can only offer limited payment options to its customers – allowing them to use their phone bill to pay for virtual goods that are consumed on the phone, such as ringtones, for example. To extend the range of payment services it can offer, Le Brocq said it is applying for an eMoney licence. This licence will allow it to hold a balance on behalf of customers, and to allow customers to purchase physical goods and send money to each other within the UK.

“Something we’re not able to do today as a mobile operator is to allow customers to make payments to each other,” continues Le Brocq. “Some operators are getting into a transfer-of-airtime arrangement, which is interesting, but I think far more interesting for consumers would be the ability to make a payment via their mobile.”

Le Brocq notes that smartphones are already playing a role in shoppers’ lives – via price-comparison sites and other shopping apps – but he said paying for goods on mobiles can be fiddly. “It can be clunky – particularly the check-out process – so we’re keen to make that smoother and easier to use,” he says. O2 plans to link up with shopping aggregators and “a number of online brands” to provide content for the forthcoming shopping service, he adds.

When it comes to contactless payments – where a contactless card or NFC mobile is swiped over a compatible reader to make a payment – Le Brocq says the operator is waiting for more retailers to install contactless terminals before making its move. In the UK, about 40,000 retailers currently accept contactless payments, including McDonald’s, Pret A Manger and Yo Sushi. Last month, credit card company Barclaycard and mobile operator Everything Everywhere announced they would be launching an NFC mobile phone this summer.

“The opportunities to use a contactless payment product – whether that’s a card or a mobile phone – are only really just growing in scale now,” continues Le Brocq, adding that the London 2012 Olympic Games are likely to give contactless a big leg up in the UK by getting more merchants on board. “The Olympics is going to be a significant milestone in the world of contactless.”

O2 announced its move into financial services in 2009 with the launch of two pre-pay Visa cards under its O2 Money brand (MPW ??). The operator collaborated with NatWest over the cards but now believes it can build and manage most of its financial services capabilities inhouse.

“The initial foray into financial services was done through a bank-partnering model,” explains Le Brocq. “We’ll continue to work with banks and other partners and providers but I think increasingly what you’ll see is O2 taking more of a role within the overall system/value chain and doing that by bringing in financial services-experienced people.”

Le Brocq, who was appointed to his current role last July, has a financial services – rather than a telecoms – background. “Having built a pre-paid card business in the past, building a mobile payments business and latching on to other financial services is something I’ve got the experience and the capabilities to do in conjunction with others that I’ll bring in to the business.”

Le Brocq says O2 plans to relaunch its pre-pay card service this year – without NatWest – making it a physical contactless card and also offering a virtual pre-pay account that can be used alongside the plastic card, but which is stored on the mobile wallet. This service will be available to all customers, not only those who use the operator’s own payment cards.

“You’ll be able to make purchases through your mobile phone and charge them to your stored value [O2 pre-pay] account, or charge them to other payment products such as an O2 credit card or the bank cards of your choice – the ones you already have within your ownership that you can drop into the wallet,” he explains.

The O2 mobile wallet will also be available to customers of other mobile operators – enabling people to make payments to each other regardless of which mobile network they use. “If you consider the wallet as an app, it’s something you could just download,” he concludes.