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Thursday, 26 May 2011

The Mobile Wallet

Shoppers in the UK are now able to make payments using their mobile phones.
A new mobile wallet service called Quick Tap has just been launched in the UK.
A joint venture between Orange and Barclaycard, it uses a concept popularly known as the ‘Mobile Wallet’.
So, could your Sim card replace your credit card? And how does it work?

Quick Tap and the Mobile Wallet are based on NFC, or Near Field Communication technology.  This is a short-range wireless technology that enables communication between different devices, and is intended primarily to be used in conjunction with mobile phones. Using NFC you could for example, transmit photos from your phone to a TV or computer, download games from a computer to a handheld device, and share files simply by touching 2 devices together.

 Obviously this technology is of considerable interest to banks, which are keen to harness its power to facilitate mobile and contactless payment systems.

At this stage Mobile Wallet technology is by no means a complete replacement for the traditional credit card.  Quick Tap users are currently only able to use the new service to make small purchases to a value of up to £15. Would-be users will also require a NFC-enabled Samsung phone, which can be pre-loaded with up to £100.00 in cash.

Participating retailers in Quick Tap include McDonalds, EAT, Pret-a-Manger, some Boots stores, Subway, Little Chef, Wilkinson and the National Trust.

Elsewhere in the world, the concept has already proved popular, notably in Africa.
In Kenya, for example, millions of people have embraced the mobile wallet technology offered by a Vodafone service called M-Pesa. That’s M for Mobile, and ‘pesa’ is Swahili for money.  In such a vast country with limited access to a transportation network, I imagine that the ability to transfer money to friends and family hundreds of miles away must be a godsend. 

With many people in Africa surviving on less than $1 a day,  bank accounts are a privilege enjoyed by only a minority of the population, and in Kenya many have made the transition from cash to the mobile wallet without ever having had a bank account, cheque book or credit/debit card.

Mobile wallet services have also been available in Japan for a number of years now.   Osaifu-Keitai, literally "Wallet Mobile", is actually a trademark of a company called NTT DoCoMo, which developed the system. Osaifu-Keitai services include electronic money, identity cards, loyalty cards, and payment of public transport fares.

Back in the UK, other mobile wallet services are set to follow; including one from O2 which is due to launch later this year.

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