Barclaycard and Orange plotting mobile wallet launch...
Credit card company Barclaycard and Everything Everywhere, owner of the Orange and T-Mobile operator brands in the UK, are launching an NFC-enabled mobile phone in early summer, which they say will be the UK's first commercial mobile wallet.
Near field communications (NFC) payment technology has been embedded in mobile handsets in countries such as Japan for years but wallet phones have only been trialled in the UK until now. The tech enables mobile wallets to be used to pay for small-value transactions, which today typically involve cash, by swiping the handset over a contactless reader.
Proponents of the technology argue it is a faster and more convenient alternative to cash, because shoppers don't normally need to enter a PIN to complete the transaction. Some even believe contactless payments will kill off cash.
"So far, handsets coming on to the market came with a promise of mobile payments in the future but by this summer Barclaycard and Orange customers will have the first phone ever that lets them do it," said David Chan, CEO of Barclaycard Consumer Europe, in a statement.
In March 2009, Orange and Barclaycard announced a long-term strategic partnership focused on mobile payments - including a plan to bring a mobile wallet to market. Early last year, the pair unwrapped a contactless credit card - the first fruit of their partnership. Orange is also planning to launch a contactless prepaid payment card under its Orange Cash brand.
"[The forthcoming mobile wallet] is part of our wider strategy to redefine what people use their mobiles for, with mobile payments being the start," said Gerry McQuade, chief development officer of Everything Everywhere, in a statement.
More than 11 million contactless debit and credit cards are already in circulation in the UK, and retailers such as Co-op and Little Chef have been rolling out contactless POS terminals, which future NFC handsets will also be able to tap into. Most recently, McDonald's jumped on the NFC bandwagon - announcing it will be rolling out contactless payments terminals in all its UK restaurants.
According to Barclaycard and Orange, more than 40,000 UK retailers will be able to process mobile wallet transactions when the NFC device - or devices - launches. The pair said they are working with "leading handset manufacturers" to get the contactless hardware out the door. Speculation that the next generation of Apple's iPhone - the iPhone 5 - will incorporate NFC payment technology has increased in recent weeks. Google has also reportedly been eyeing NFC for its Android platform.
"This is the beginning of a revolution in how we pay for things on the high street. It's a cultural shift that is as important as the launch of the personal credit card or ATMs," claimed Everything Everywhere's McQuade. "Very soon, using your mobile to buy a sandwich, a cinema ticket or, in time, even something bigger like a computer will simply be the norm."
"I believe future generations will find it surprising that early this century we were still carrying separate items to buy goods and to communicate with each other," added Barclaycard's Chan.
The pair said their forthcoming mobile wallet will use the SIM card as a secure element to beef up the security of the payments system, and also to provide a single point of customer care contact. The payment capability for the contactless mobile transactions will be provided by MasterCard.
Barclaycard and Orange are not the only payments companies and mobile operators kicking the tyres of contactless tech. Last year, Visa and Telefonica conducted a six-month mobile wallet trial in Spain, with Spanish bank La Caixa.
Momentum behind mobile wallets may be unstoppable but not everyone is convinced the rise of contactless spells the death of cash. "This clamour that cash is dead, the wallet is dead or credit cards are toast is complete nonsense, now and for the foreseeable future," said mobile analyst Dean Bubley of Disruptive Analysis, in a blog post about mobile payments. "I'd be more willing to believe that retina scans, DNA authentication, telepathy or a William Gibson-style direct neural interface for payments will happen first."