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News in-depth: O2 enters contactless payment market
27 Apr 2012

Mobile network O2 has launched a new app that allows users to transfer funds via text message and make contactless payments in UK retailers.

The new mobile phone application, called O2 Wallet, will offer mobile phone users the chance to securely transfer between £1 and £500 a day to any UK mobile phone number.

Available to customers on any mobile phone network, the O2 Wallet will also allow customers with a near-field communication (NFC)-enabled mobile phone to complete contactless payments at over more than 100 participating retailers.

Among the firms set to take part in the scheme include Comet, Sainsbury's Direct Debenhams and Tesco Direct.

James Le Brocq, managing director at O2 Money, expects the new app to "transform" the way in which people manage their finances and spend money.

"We recognise that security is absolutely key. O2 Wallet has been trialled internally for months and has undergone extensive 'stress-testing' with security experts," he said.

"In addition to pins and passwords, all personal details and financial data are held on remote central servers rather than on the mobile device itself. This, we believe, is the safest and most secure way to deliver mobile payment services."

O2 Wallet will also include a search facility that will help users compare and contrast how much goods cost in a range of retailers.

Funds can be loaded onto the app from a bank card and customers can keep track of spending by accessing their transaction history.

The service could increase the uptake of contactless payments in the UK, with O2 estimating that around 200,000 of its customers in the UK own an NFC-enabled phone.

Furthermore, Juniper Research recently forecast that one in six mobile devices will feature NFC technology by 2014.

It follows the launch of Barclays' own mobile payment app, Pingit, earlier this year, which has recently been opened up to customers of rival banks.

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