April 26, 2012
Mobile digital wallets are emerging and going beyond payment. New technologies, mixing QR codes, apps, personal financial management software, NFC, and many more, are combining to convert mobile handsets into digital wallets that combine not just payments but also receipts, vouchers, and loyalty. Beyond the convenience of using the phone for payment, consumers will benefit from post-transaction elements such as location-based coupons or enhanced product information at the point of sale (POS).
We’ve not seen a single day without a new product launch, start-up creation, or acquisition — or a new strategic alliance between banks, payment networks, Internet firms, or mobile operators.
So what’s new today? Telefonica 02 just announced the launch of O2 Wallet in the UK.
We believe that the O2 Wallet is, for now, the most comprehensive mobile payment solution in the UK – available to a majority of smartphone owners, whether they are O2 customers or not. The new product combines the following functions:
- Money Message — This gives customers the ability to easily transfer money to any UK mobile phone number.
- Shopping via your mobile — A barcode and search engine function compares the prices of millions of branded goods from more than 100 online retailers. In addition, consumers will enjoy unique-to-O2 daily discounts and deals via the "My Offers" icon.
- Your phone as your wallet — O2 Wallet enables consumers to digitize their existing debit and credit cards.
- O2 Money Account Card — O2 Wallet offers both a physical and a virtual O2 Money Account Card. It’s a prepaid card and aims at making it easier for customers wanting to manage their finances, as they can only spend what they put in.
Moving forward, O2 could combine its mobile loyalty offering (O2 More) and its location-based deals offering (02 Priority Moments) with its mobile payment solution.
It's great to see operators like O2 launching innovative products. Operators are also joining forces and are willing to play a key enabler role combining mobile marketing and mobile payments(e.g., project Oscar in the UK).
Operators still have weaknesses to overcome if they want to become significant players in this space. However, one should not forget that operators have key assets to leverage in this digital wallet war. They also offer a go-to-market and a distribution channel for banks and other financial firms.
My colleague Denée Carrington, our lead payment analyst, will soon publish a new piece of research on digital wallets. Stay tuned.
In the meantime, we'd love to hear your thoughts on mobile payment disruption and the role of operators in this war, so feel free to comment below or to contact us.