Out-Law News | 14 Jan 2014 | 2:26 pm | 4 min. read
The O2 Wallet was launched in April 2012. It allows users to download a free application onto their smartphones or use a 'Money Messages' function on other devices so as to make mobile payments. However, the company has now announced its intention to close the product.
"When we launched the O2 Wallet 18 months ago we were one of the first mobile wallets around," O2 said in a blog. "Since then lots has changed for us, the market and our customers. So, we've decided to close the O2 Wallet to give us time to look into new and better ways to help people manage their money on the move, both in the UK and abroad. It's been an exciting journey ... [but] it's not over yet - we'll let you know about any new innovations in the future."
"After the 31st of March you won't be able to use your O2 Wallet or O2 Money Account Card anymore - that includes sending or receiving Money Messages, using the O2 Wallet or card to shop, buy train tickets in the app or top up your mobile," it added.
O2 is involved in a joint venture arrangement with fellow mobile network providers EE and Vodafone for the creation of a new mobile commerce service, 'Weve'.
Weve is set to launch in the spring of this year. The joint venture previously survived a challenge on competition law grounds brought by mobile network provider Three.
A number of major UK banks, including Barclays, HSBC and Lloyds, have signed up to participate in the Weve scheme, whilst Ford, Tesco and Unilever are among the companies to be working with the joint venture company on advertising initiatives.
"Our business is underpinned by intelligent data insights that allow brands to target the right people, at the right time, in the right place," according to a statement on the Weve website.
"By storing everything from loyalty cards, coupons, to credit and debit cards in one place, our wallet technology will enable companies of all sizes to get involved in the mobile wallet revolution. With Weve businesses can do a single commercial deal and a single piece of technical integration that will enable their consumers to transfer their card-based data into their mobile wallets; saving businesses significant amounts of time, money and technical resources, while making life as easy as possible for their customers."
"Ultimately, this will allow consumers to purchase goods and services safely and securely using their smartphones, in a huge variety of locations – everywhere from physical retail outlets to online stores and even from other mobile users," it added.
In a blog published earlier this month, product development director at Weve Sean O'Connell said that both the technology and consumers are now ready to allow mobile payments to take off. "The key is to adopt standards that really work for consumers – a big push for Weve in 2014," he said.
The market for mobile payments in other parts of the world is at differing stages of development.
In Sweden, four mobile network operators entered into a deal to provide their own combined mobile payment solution last year. According to a report by The Economist, the system can be used by 97% of mobile users in Sweden to pay for goods and services at partnering businesses.
A separate project designed by Stockholm-based business Seamless enables mobile payments to be processed without the need for sensitive data to be communicated over online systems. More than 1,000 businesses already facilitate payments via Seamless' technology and it is anticipated that a further 3,000 retail outlets will follow their lead this year, according to the report.
In Japan, Celent, an IT consultancy business operating in the financial services sector, released a recent report that flagged up the potential of innovations in mobile payments in the country. However, the report found that Japanese consumers are still used to making payments in cash and said more needed to be done to bring mobile wallets or other mobile payment solutions into the mainstream, according to a summary of the report by BankingTech.
"Despite the hype surrounding mobile payments, Celent recommends that Japanese issuers and their partners make careful decisions where to place their bets and what kind of business model to pursue in mobile payments," Zilvinas Bareisis, senior analyst at Celent, said in his report, according to the BankingTech article.
In Brazil, the president of payments consultancy Paytroniks Joe Frisz predicted that the market for mobile payments in that country would grow to be one of the world's biggest over the next five years, according to a report by PRWeb. Frisz predicted that 2014 would see mobile companies and financial institutions launch new initiatives in the market.
Frisz also said that guidelines developed by regulators in Brazil provides scope for innovations to be made in mobile payments.
"What the central bank of Brazil and [the National Monetary Council (CMN) in the country] are saying is that mobile payment solutions can become a conduit for increased overall financial inclusion for Brazilians without necessarily including banks," Frisz said, according to the PRWeb report. "This will result in an increased business proposition for the solutions and a shorter path to mass adoption. At the same time though, the CMN remains vigilant of protecting consumers from abusive or misleading business tactics and reserves the right to apply stronger regulation if necessary."
Editor's note 15/1/14: this story has been corrected to remove the suggestion that Weve is linked to the UK Payments Council, which it is not. We apologise for the error.