O2 to rival Google and PayPal with new mobile payments service

By Sooraj Shah
27 Apr 2012 View Comments
mobilepayment

Mobile operator O2 has launched a mobile payments service that will allow consumers to pay for goods and services online, and transfer up to £500 daily to any UK mobile phone number using an iPad or smartphone.

The application will rival Google Wallet, PayPal and Barclays PingIt, which all offer mobile payment services.

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O2 said that its new service, dubbed O2 Wallet, can link to consumers' existing Visa and MasterCard credit or debit cards to upload funds, and can also allow users to pay for shopping in a physical retail environment at more than 100 online retailers by using a barcode and search engine function.

Eden Zoller, principal analyst at research firm Ovum, believes that the service is the most comprehensive of its kind to be launched by a European mobile operator.

"It features money transfers, price comparisons, offers and promotions, and the ability to link existing Visa and MasterCard credit or debit cards to the O2 Wallet account along with prepaid options," he explained.

However, he lamented the lack of support for near-field communication (NFC) technology.

"A notable omission is the lack of support for NFC, making the service essentially a mobile web and online proposition, although O2 is looking to introduce NFC in the future," he said.

Zoller said that the service would need to deliver "air-tight security and a seamless user experience across the multiple applications contained in the wallet".

He also said that there could be implications in the future for O2's joint mobile payments venture with Vodafone and Everything Everywhere.

The venture, entitled Project Oscar, is currently under investigation by The European Commission after the EC said that other mobile operators may struggle to get a foothold in the mobile payments, advertising and related data analytics markets, as the joint venture may have "very high market shares".

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