O2's new mobile money service will be free for the first six months, but the operator has said no decision has been made about whether it will charge customers afterwards.
The O2 Wallet launched today (26 April) and is available as an app across Android, iOS and BlackBerry. The Wallet enables consumers to transfer money up to £500 to any UK mobile phone number.
Customers can add their credit and debit cards to the service or top-up their account through more than 30,000 locations, including O2 stores. Consumers can also top-up their device using a prepaid Visa card, which the operator said would be a means for them to only spend what they put in. The app also offers a barcode scanning option that allows customers to compare prices from more than 100 online retailers, including Debenhams, Tesco Direct, Comet and Sainsbury's Direct.
O2 said the service would be developed in the future to include Near Field Communications (NFC) technology to enable contactless payments, as well as top-up airtime and buy train tickets. Feature phone users will be able to access the service via web browsing on their handsets.
O2 Money MD James le Brocq said: 'O2 Wallet delivers the benefits of mobile money to more UK consumers than any other product or service currently available. With O2 Wallet, it's easier to track money, track expenditure and pay swiftly and securely, all using your mobile. We believe it will transform the way people manage their finances and spend money.'
O2 had planned to launch the service by the end of last year but said it was delayed for further testing. At a press conference yesterday, Le Brocq offered a demonstration of the service. It took a fee of 15p for every pound transferred but Le Brocq stressed this decision is not final. He said: 'It's a free service for at least the first six months. We are aware Barclays offers its Pingit service for free. It's an option to charge but the decision has not been made.'
When asked why the app was not available to Windows Phone users, he said it was a question of managing 'finite resources' in developing the app. He said: 'Windows is a great platform but I wanted to get service to market across a broad spectrum as early as possible.'
The app will be backed by a social media campaign, with above the line (ATL) marketing to follow later in the year.
Eden Zoller, principal analyst at Ovum, said O2's proposition was 'one of the most comprehensive of its kind' to be offered by a European operator. However, he added: '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 also warned operators will be under pressure from companies like Google, whose mobile wallet offers will move the business model towards mobile advertising, which he said is an area operators have little experience. He said: 'The danger is that operator mobile payment ventures will not move quickly enough, hampered by lack of consensus and slow decision making.'
Guillemrmo Escofet, senior analyst at Informa, said: 'Will O2 Wallet be successful? It has a greater chance of success than mobile payment services solely focused on NFC. But O2 faces the same challenges that all other telcos face when competing against so-called over-the-top players - global online companies such as PayPal and Google that have greater geographic reach, brand appeal and agility.'
Editor: Graeme Neill