Mobile money hits the UK like it means business

This is probably the most significant week the UK has ever seen for mobile money. Two of the biggest operators in the country have announced mobile money implementations – Orange is going for a straightforward NFC-based payments model, whereas O2 looks like it wants the whole mobile banking hog.

What’s the news?

There are two separate stories. Both O2 and Orange have both announced pretty ambitious services to help you pay on the go with your mobile phone. Since Orange’s service is coming first, let’s start with that:

Orange’s Mobile Wallet

Orange has teamed up with BarclayCard to create payment service called Quick Tap. Now, this is a “retail payment” service, which means it is literally only to be used by consumers who are buying low-value goods in a retailer. At the moment, it only works on the Samsung Tocco – a mid-range, NFC-enabled device – but it will quickly be expanded to work on other NFC phones.

The way it works is that you download the Quick Tap app to your phone, and load money onto it from a Barclays debit card or an Orange credit card. Once the money is loaded onto your app’s “account”, you can use it to pay for goods in a store. You do this by simply tapping your phone against an NFC reader at the checkout – and Orange says that there are 50,000 of these readers around the country already. It only allows transactions of up to £15, and you have the option of requiring a PIN code entry every time you use it, so the security is pretty good.

In order to encourage people to use it, Barclaycard is giving any Orange customer who activates the app a free £10 to their account, along with a 10% cash back reward for every single purchase made in the first three months.

O2′s Mobile Banking Services

While both operators are creating “mobile wallet” applications, O2 is going about this in a remarkably different fashion to Orange. Orange has made a partnership with an existing financial services provider in order to get its service rolling. O2 is attempting to do it much more in-house than that – it is in the process of becoming an Authorised Electronic Money Institution, so it won’t need a finance partner to back up those services for it.

Now, that’s not to say it’s doing this without partners. While O2 can do the mobile and finance parts itself, it still needs help for equipment, NFC enabling, transactions and developing the actual app. It’s widely reported that O2 is working with Wave Crest, Intelligent Environments, Visa Europ and FIS to create the O2 Money application.

So, what will the O2 Money app actually do? Like Quick Tap, it will be an application that you can download onto your phone (which NFC devices it will support has yet to be announced). It’s part of a major rehaul of the O2 Money service, which the company announced earlier this month. The O2 wallet should allow the same kind of retails payments that Orange enables, but also allows consumers to transfer money from their app to other people. There may be other capabilities announced in the months to come.

What we think?

It seems to me that coming to market first is a major advantage for Orange here. It really, really needs to capitalize on that advantage by launching for multiple new devices in the near future, though. The Tocco is a fine phone, but it’s not exactly the most populous device out there. Orange needs to get a lot more UK residents using this service if it wants to make hay out of the several months it gets being the only game in town.