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27th April 2012

O2 / Telefónica UK mobile wallet launch

O2, the UK Mobile Network Operator (MNO) and Telefónica subsidiary, has launched its own mobile wallet in conjunction with Visa Europe. The wallet has a comprehensive specification although does not yet offer contactless payment. Contactless is promised to follow when there is more retail support for it.


The wallet offers:

- Money Message – O2 Wallet allows money transfer to any UK mobile phone. Money Messages allow consumers to make daily transfers of between £1 and £500.

- Shopping via your mobile. A barcode and search engine function compares the prices of millions of branded goods from more than 100 online retailers. It has, of course, an electronic discount coupon offering supported by many of the UK's largest retailers.

- Your phone as your wallet. Ability to 'digitise existing debit and credit cards making it quick and easy to pay for things". Customers can load money into their O2 Wallet account via one of their debit cards, by receiving a Money Message or with cash at more than 30,000 locations including O2 stores, PayPoint and epay retail outlets.

- O2 Money Account Card – O2 Wallet offers both a physical and a virtual O2 Money Account Card. Both are based on the Visa prepaid account. The ‘virtual’ O2 Money Visa Account Card is perfect for online shopping. Customers can also apply for the physical O2 Money Visa Account Card to pay for things on the high street or withdraw cash from ATMs. This is a contactless card allowing tap-and-go payments.


A key difference between this wallet and many other actual or proposed wallets is that much of the sensitive data is held on secure servers and not on the phone itself. Whilst there is the obvious disadvantage of requiring the user to be within a reception area it avoids many of the security, theft and compatibility complications. O2 say that the application has been under test for months including 'stress testing' by security experts.


The wallet is said to be available for the majority of smartphones and the Money Messages service available on more basic phones. Telefónica is emerging as a leading player in mpayments working both with Visa and MasterCard in different regions. It has gained the support of many of the major UK retailers for this service. Although initially giving the money message service for free the network says that it plans to charge 15p per transfer after the initial period.


The European Union is investigating a plan around for some time by the four largest Mobile Network Operators in Europe to develop a joint mobile wallet. With the two largest - Vodafone and Telefónica - both rapidly deploying their own wallets the validity of the joint project may be in question now.


O2 states that it has had an application for an e-money license lodged with the Financial Services Authority for more than a year, and in the interim has partnered with Gibraltar-based IDT Financial pending authorisation from the FSA.