The O2 Wallet launched in the UK on April 26th. O2 described it as 'A seamless and secure digital wallet service that will deliver the benefits of mobile money to more UK consumers than any other product or service currently available.'
It is available to all UK consumers regardless of carrier or bank on iOS (iPhone and iPad), Android and BlackBerry.The Wallet combines four functions:
Money Message: Enables consumers to securely transfer up to £500 from a bank account or Visa pre-paid card to any UK mobile phone number as easily as sending a text. Both, the sender and receiver, need to have an active O2 Wallet.Shopping:
A comprehensive barcode and search engine function compares the prices of millions of branded goods from more than 100 online retailers and allows the user to make purchases directly from their phone. This function includes daily discounts and deals. Phone as Wallet: It enables consumers to digitise their existing debit and credit cards making it quick and easy to pay for things via their mobile. Money can be loaded onto the Wallet via a debit card, by receiving a Money Message or with cash at more than 30,000 locations including O2 stores, PayPoint and epay retail outlets. Transaction history can help the Wallet owner keep track of spending.Money Account Card: The Wallet offers both a virtual and a physical card based on a Visa prepaid account. The cards are ideal for on-line and off-line transactions respectively.
ReviewSetupThe O2 Wallet can be used by any consumer with a number of mobile phones (iOS iPhones and iPads, Android and BlackBerry devices) regardless of their service provider. I have an iPhone running on the '3' network. As far as I could tell, I did not experience any constraint, limitation or additional burden compared to O2 customers. Having said this, the setup itself was slow and complicated because:
I needed to setup four different passwords - with different requirements - that I was then asked to enter multiple times during the setup process, making it rather a laborious task. One password is to access the wallet, another to 'keep it safe', another to access the Money Account and yet a fourth one to authorize transactions.
Each credit / debit card entered was checked via 'Verified by Visa'.Each account entered was checked via a small money transfer made by O2 that included a unique code I then had to enter into the phone.Any error I made in setting up a card or account sent me back to the beginning of the setup.
All in all, setup took well over an hour although I did not enter all my accounts & cards. All the passwords and checks may be necessary to comply with security requirements set by banks and credit card companies and perhaps help customers overcome their safety concerns. At the same time, it would seem that O2, along with all other mobile wallet providers, will need to innovate in order to help customers get over this first hurdle in mobile wallet adoption.
As shown in the presentation above, the app itself is very clean, well designed and very easy to use. It works exactly as advertised but the user will quickly realize its shortcomings:
Lack of NFC is a major issue since it, effectively, precludes you from using your phone to buy off-line. O2 will include NFC capabilities in the wallet at a later stage, probably once it feels the infrastructure (contactless POSs and NFC-enabled phones) is in place. Meanwhile, the carrier mitigates this issue by linking a physical card (a pre-paid Visa card provided by O2) to the wallet. This card can be used to pay at stores and also to withdraw money from cash-points. Nevertheless, needing a physical card to buy at the high-street (even in those locations with contactless POSs) feels a bit clunky.Vouchers are a welcome feature but, until they are better tailored and personalized to each consumer, its essentially the same as offers you could get from Groupon. O2 needs to improve this capability in order to differentiate itself.The scanning function is a very good idea but the technical implementation is far from perfect: It has great difficulties pickup small barcodes and it often misreads the larger ones.'Money Messages' are a good idea, although the same functionality can be achieved via PayPal and PingIt. The main drawback is that the receiver needs to have an O2 Wallet installed. This means that they will need to go through the painful setup described above to receive the payment.Last ThoughtsThe O2 Wallet seems to be more of a service competing with PayPal transfers or with PingIt than a full-blown wallet. As much as I admire O2's determination to be first to launch a mobile wallet in the UK, it feels like a 'half-baked' product launched in a rush to have a presence during the 2012 London Olympics given that Project Oscar has been delayed due to the in-depth investigation being carried out by the European Commission.
How will O2 tie the Wallet to the Olympics? We are only a couple of days into this big event but, for the moment, I have not found the link.It is not yet clear the costs and fees associated with the wallet. For example, transfers expected to remain free for the first 6 months but then 15p will be charged to the sender for each transaction. Withdrawing money from cash machines with the physical card has a £1 fee associated. All information - passwords, credit card numbers, account numbers, transaction history... - is stored in the cloud, not on the phone. This, along with the four different passwords necessary to open and use the wallet, gives a high level of security to this payment method. From my perspective, they will need to finetune the number of passwords necessary to operate the wallet - four are just too many to remember and too cumbersome to use - but it is an aceptable starting point given the importance of security concerns.
London 2012 provides mobile players a fertile ground to test numerous payment initiatives. Let's see how this one fairs against the rest. Meanwhile, enjoy The Games!