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O2 tests UK mobile-phone usage for purchases

August 18, 2009

o2O2, a British provider of mobile and home broadband services to consumers and businesses, launched Britain’s first large-scale pilot of Near Field Communications (NFC) technology on mobile phones.

The trial of the O2 Wallet paves the way for the mass-market use of mobile phones to pay for purchases, access events or even be used as Oyster cards for travel around London simply by touching the phone to a reader.

The trial, which will involve over 500 people invited from the O2 customer base, takes place across selected sites throughout London. It runs through the end of May.

NFC is a contactless functionality, enabling a wide range of secure uses including cashless payments, public transport, event ticketing, and smart posters.

In order to make this as comprehensive a pilot as possible, O2 has brought together a broad range of partners, including Transport for London, TranSys, Barclaycard, Visa Europe, Nokia and AEG.

World in an Oyster
Each participant will be given a Nokia 6131 NFC handset installed with the O2 Wallet. Just like a normal wallet, this will hold various cards, including Oyster and Barclaycard, but in virtual form and with NFC functionality.

Participants will be able to test a wide range of different services in London, such as making purchases in retail outlets and travelling on London’s public transport system.

All participants will be asked to provide feedback on the services featured in the O2 Wallet, evaluating its ease of use and security.

The participants will have Oyster on their phone, enabling them to use their handset to pay for travel on the Tube, buses and trams across London.

Also, they will be able to top up their Oyster by touching their handset on Oyster ticket machines in Tube stations or at Oyster ticket stops. If a participant’s phone rings, he or she can still answer the call and continue to make a transaction. A call or text message will not interfere with the NFC service.

In addition, participants will be able to touch the NFC-enabled handset on selected smart posters at the launch and at other locations over the course of the trial.

The smart posters contain embedded tags which serve as shortcuts for services enabled through the handset. Once users taps the poster with the handset, they will automatically dial a number, send a text message or be sent a shortcut to a mobile Internet site with more information about the subject on the poster — an event taking place or downloading content, for example.

The trial will also examine mobile payments using the Barclaycard payment application in the O2 Wallet.

O2 eat 2
A subset of participants will be able to use the growing number of ‘contactless’ payment readers at retailers in and around London to buy goods for $20 or under. They will simply need to tap their phones on the secure reader and transactions will be completed in a matter of seconds.

In the initial phase of the trial, Barclaycard will credit each phone with $414 worth of non-reloadable funds which consumers can use and spend as they see fit at any participating retailer. 

As well as making payments, they will also be able to use the phones to check available funds and to locate retailers close to them that accept ‘contactless’ payments, including Books Etc, Chop’d, Coffee Republic, EAT, Krispy Kreme, Threshers and YO! Sushi.

O2’s partners intend to extend the payment functionality delivered to participants as part of the O2 Wallet and are discussing the opportunities to develop the trial service further in 2008.  Possible developments include PIN capability, over $20 purchases and reloadable/credit funds capability.

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Mickey Alam Khan is editor in chief of Mobile Commerce Daily, Mobile Marketer and Luxury Daily. Reach him at

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