O2 plans a “virtual” wallet

O2 is applying to the financial regulator for an e-money licence as it prepares to launch its mobile contactless payment services in the second half of this year.

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The telecoms company is putting in an application to the Financial Services Authority to enable O2 to act as an independent financial services provider, without the need to partner with a bank.

This will allow O2 to “hold” money on behalf of customers in a virtual “wallet” to enable them to make purchases through their mobiles or use their device to send money to other people.

The service, which is likely to take the form of an app, is due for launch in the second half of this year and will also be available to non-O2 customers.

O2’s managing director of financial services James le Brocq says: “The O2 wallet concept is about bringing the physical wallet and its contents to the mobile – this can include payment cards, loyalty cards and cash – but it goes beyond paying for things, it’s really about being a house for a variety of services for customers on the go.”

He says the new technology could also incorporate access to retail websites, price comparison services, phone airtime top-ups, ticketing, travelcards and special offers.

Le Brocq says he is not concerned about Everything Everywhere claiming last month that it will beat O2 to become the first network to launch mobile contactless payment in the UK.

He adds: “It is good news that we have more than one operator [launching NFC payment] in the UK market, but who gets there first is not important, what’s more important is who drives the better levels of engagement with customers.”

O2 is “investing substantially” in its money division and its 30-strong team is expanding in preparation for the new launch.

O2 launched pre-payment cards in partnership with NatWest in 2009 and le Brocq says over 800,000 customers are currently engaging in the company’s financial services which also include travel and device insurance.

O2 also plans to relaunch its pre-pay card service this year without NatWest to include a physical contactless card and a virtual pre-pay account.

He adds: “The O2 brand has stretched beyond mobile, but the crux of what we do will always have mobile at its core to make it relevant to our customer base.”

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