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Let the mobile wallet wars begin

I don’t normally cover press releases, but this one is a goodie as it’s announcing a new mobile wallet and, thanks to this chart (doubleclick chart to enlarge):

O2 wallet1

Let the wallet wars begin.

Here’s what the press release says:

O2 today announced the launch of O2 Wallet – a seamless and secure digital wallet service that will deliver the benefits of mobile money to more UK consumers than any other product or service currently available.

Here’s the video:

O2 Wallet is the new way to send and receive money, compare prices and shop via your mobile; and you can use it whether you’re with O2 or not – meaning anyone can take advantage of its numerous features.

O2 Wallet uniquely combines the following functions:

O2 wallet

  • Money Message – O2 Wallet enables consumers to securely transfer money to any UK mobile phone number as easily as sending a text. Money Messages allow consumers to make daily transfers of between £1 and £500; and will make lending, borrowing or repaying money to friends and family easier than ever.
  • Shopping via your mobile – O2 Wallet makes shopping via your mobile a breeze. A comprehensive barcode and search engine function compares the prices of millions of branded goods from more than 100 online retailers. In addition, consumers will enjoy unique daily discounts and deals via the ‘My Offers’ icon. At launch these will include discounts and money off offers from retailers such as Debenhams, Comet, Sainsbury’s Direct, and Tesco Direct
  • Your phone as your wallet – O2 Wallet enables consumers to digitise their existing debit and credit cards making it quick and easy to pay for things via their mobile. 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 Wallet’s ‘transaction history’ helps consumers keep on top of their expenditure with texts alerts when the account balance changes; a 30 day payment history on the app; and a 12 month history online. In time, O2 Wallet will evolve to incorporate near field communications (NFC) technology and enable contactless payments direct from your handset.
  • O2 Money Account Card – O2 Wallet offers both a physical and a virtual O2 Money Account Card. Both are based on a Visa prepaid account making them ideal for customers wanting to manage their finances as they can only spend what they put in. The ‘virtual’ O2 Money Visa Account Card is perfect for online shopping. Consumers 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 at more than 100,000 contactless payment points across the UK; it’s fast, easy and convenient.

James Le Brocq, Managing Director at O2 Money, 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 transfer 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.”

Additional functionality will soon enable consumers to use O2 Wallet to top-up mobile airtime, buy train tickets and make mobile contactless payments via NFC technology.

O2 wallet3

James continues, “We recognise that security is absolutely key. O2 Wallet has been trialled internally for months and has undergone extensive ‘stress-testing’ with security experts. In additional 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.”

Sandra Alzetta, Senior Vice President of Mobile at Visa Europe, adds: “We welcome the launch of O2 Wallet and are delighted to be enabling the m-commerce experience with a Visa prepaid card. The new service creates an easy and efficient online payment experience for mobile device users, supporting the continued growth of m-commerce in the UK, as well as encouraging contactless payments among those users who choose to take a physical card. This announcement is another step towards an integrated future where the way we pay reflects the full potential of these new technologies.”

O2 Wallet is compatible with the majority of smartphones as well as iPads. Even those without a smartphone can use various features of O2 Wallet – for example Money Messages – providing they have web browsing capability on their handsets.

O2 Wallet has been developed by a team of 250 experts from a variety of specialist fields including financial payments and e and m-commerce. In addition, O2 has worked with a number of specialist partners including global e-payments company Wave Crest; global banking and payment technology provider FIS; digital banking solutions provider Intelligent Environments; G&D for its contactless payment cards; IDT Financial Services Limited which is providing an interim e-money licence and BIN sponsorship whilst O2’s own e-money licence is approved; Cogenta for its product search and promotion capabilities and Visa Europe for the payment brand and contactless payment technology.

The launch of O2 Wallet will come as good news to the millions of consumers who already use their mobile to manage their money and shop on the go. The proportion of people using mobile banking increased from 9.7% in 2010 to 20.4% in 2011*; whilst shopping on mobile devices is set to increase by 53% in the next 12 months hitting £4.5bn** and making Brits the biggest mobile shoppers in Europe.

*TNS Mobile Life, 2011

** Kelkoo & Centre for Retail Research


About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • Hmm. I have such a hard time keeping track of mobile wallet developments these days. Wasn’t O2 supposed to be in a big NFC rollout with Barclaycard, or was that someone else? Oh, now I see; NFC is “coming soon.” Scrupulous honesty on the chart then, except that by the same standards you’d have to give PayPal digital wallet functionality. And it’s hard to believe that Google, the king of search, wouldn’t have some sort of comparison feature. I note a lot of partners in there – is this O2’s wallet, or FIS? Perhaps it should be renamed “the Fog of War.”

  • In the search for differentiation all the players in the charts have come at this from slightly different angles to be gin with but it won’t be long before all the boxes show green ticks for all suppliers. What will be intriguing will be whether consumers will go for pre-pay in this context or whether they will prefer an account linked system like Paypal. The second question is whether these platforms cn deliver real value for merchants – I believe card-linked schemes will struggle in this regard due to the structural cost of interchange. Finally, will the consumer offers be compelling enough to drive adoption and the inconvenience of pre-pay? We shall see.

  • Interesting summary table. Assuming it is accurate and that these are the top 5 mobile wallet players, it tells a disruptive story: 2 are Telcos, 2 are Web giants and only one is a Bank (with the least ticks…). A key customer touchpoint of a financial service relationship is payments and money transfers. These services were traditionally initiated and processed though Banking products & networks. Even when these activities require -necessarily- the use of a banking product such as a credit/debit card or a bank account, customers under these m-wallet models are ‘migrating’, or experimenting with non-banking service channels. What does this really mean? Apart from the obvious transaction-fee sharing with non-traditional players, Banks stand to lose interaction with their customers at POS (point-of-service) and branding capability. I think Banks need to choose a clear strategy on what they want to do and act on it, between two main options: being a primary service channel with their own branding or just a processing channel servicing a non-traditional player. It seems that at least Barclays is crystal clear about this…