O2 mobile payments trial proves popular, but no deployment planned

The results of an NFC-based mobile payments trial has clearly indicated that cell phone users want to use such services. Over 90 percent of the O2 subscribers involved with the trial said they would happily use the technology, while nearly 80 percent said they would use more contactless services if they were available.

The trial involved 500 users who were provided with Nokia handsets and partly loaded up with cash by O2 to pay for store purchases and journeys on London Transport.

However, O2 said there were several issues to resolve before any chance of deploying NFC-based services -- primarily the need for a greater range of NFC-enabled handsets and the formation of a consortium of banks, credit card companies and retailers that would actively support the scheme.

Claire Maslen, head of NFC at O2, said it could launch the service now, but was waiting for more support from partners. "Launching in six months would be hugely optimistic. It has to be mass market to make it successful and I think it's key that that we have two or three major retailers as partners. If they come on board it'll have a major effect on roll-out."

Mobile payments have been operational in Japan for some years, but retail sales using the technology are still less than 1 percent. Most analysts believe that the thin margins involved with the majority of mobile payments are unattractive to many of the key participants, such as retailers and credit card providers. The O2 trial largely made use of existing infrastructure that is employed to support the London Transport Oyster Card system.

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