O2, NatWest cash in with prepay Visa cards
But no NFC mobile wallets in sight - yet...
If the credit crunch has killed the credit card O2, reckons it has the answer: the mobile operator has announced a move into financial services with the launch of two pre-payment Visa cards in partnership with NatWest.
Both O2 Money cards are feeless and available to O2 customers from next month. The Cash Manager card is aimed at adults, with users getting balance updates by SMS every time they make a payment with the card.
The Load & Go card is aimed at the youth market as an alternative to pocket money or having to rely on the parental credit card to shop online. Parents can load it with credit which users aged 13 years and upwards can then spend themselves.
Analysts have long been predicting a coming together of the mobile and payments markets owing to the ubiquity of mobile phones and the rise of contactless payment technologies such as NFC (near field communications), with mobile payments predicted to grow to over $300bn per year globally by 2013.
However O2 Money takes a more traditional approach to payments by keeping mobile and cash card separate entities - for now.
The operator caused excitement back in November 2007 when it launched a trial of a mobile wallet phone yet almost two years later there is still no commercial launch.
Asked today when the UK could expect to see a bona fide wallet phone, Dunne again refused to specify a timeframe but said O2 Money is the "first step" towards the launch of mobile payment products.
Financial services and mobile phones "will be integral parts of the same industry in due course", according to Dunne who said the increasingly rich capabilities of smartphones is helping the two converge.
A spokeswoman for O2's cash card partner NatWest added that mobiles and financial services are now "inextricable linked".
"Today this is the start of a journey - we see this partnership as the beginning, the start of a launch of hopefully more products to come in this space," she said.
According to O2's Dunne, the challenge now facing contactless payments is the need for a wider deployment of electronic point-of-sale terminals equipped with NFC capabilities. Until there is a critical mass of readers in the UK, he said mobile makers won't see much point in putting NFC in handsets: "There's a little bit of chicken and egg timing," he added.
Dunne said O2 is currently talking to large retailers and the transport industry about deploying NFC terminals.
"I would be very confident that you'll see substantive progress in that space under the O2 brand in the not too distant future," he added.