The prospect of using a mobile phone to make purchases could change the shape of consumer-business interaction in the coming years, as new technology offers the potential for consumers to house credit and other card information on their mobile phones.

Europe’s largest trial of Near Field Communications (NFC) technology on mobile phones, conducted by research firm GFK and commissioned by O2 (a leading UK communications company), has revealed strong consumer demand for such services.

Nine out of ten trialists were happy using NFC technology on a mobile phone and 78 per cent said they would be interested in using contactless services if available. Convenience, ease-of-use and the status of having such an innovative device were seen as the main benefits amongst trial participants. Over two-thirds of trialists also said that they would be interested in having the Barclaycard Visa payWave feature on their mobile in the future.

The O2 Wallet trial took place over six months between November 2007 and May 2008 and involved 500 participants. It tested consumer demand for having cards you would normally carry in a wallet, such as credit cards, available on a Nokia NFC mobile phone. To travel on London’s transport system or make purchases in retail stores, the user simply touched the phone against a reader.

There is great potential for such technology to be a success, according to researchers. “Imagine going out for the night and only taking your mobile phone with you,” mused Claire Maslen, Head of NFC at O2. “This trial takes us one step forward to achieving this by demonstrating that people want the convenience and practical benefits offered by services like the O2 Wallet.”

Contactless Payments on Mobile

A selection of trialists were provided with the Barclaycard Visa payWave application on the Nokia 6131 NFC mobile phone and, following the trial, over two-thirds stated that they would be interested in using cashless payments on their mobile in the future. In addition, nearly half (47%) of trialists stated that being able to use their mobile to make payments would influence their choice of handset in the future.

Insights for the Future

The trial provides crucial insights into helping ensure that the customer experience is right before bringing the O2 Wallet to market:

* Choice of handsets is crucial – 85% of trialists felt that the make and model of the handset would influence their decision to take up NFC services
* User Interface – while the UI was popular, participants wanted the ability to manage their accounts and view Oyster and Barclaycard balances through the application
* Security – while this was an important consideration, trialists wanted speed and convenience from using their mobile phone but could see the benefits of being asked for a PIN periodically to enhance security, similar to the contactless card experience today

Ms Maslen added that the future of mobile technology could lead to all cards found in a typical wallet/purse being available on a mobile phone. “In theory, any card that you carry in your wallet could be on your mobile in the future,” she commented. “To make this a reality we need to work across industry with a shared vision of what commercial services will look like. To that end O2 will be proposing an industry taskforce with the aim of bringing together mobile operators, handset manufacturers and key players from the transport and finance sectors to form the foundations for commercial NFC on mobile services.”

About the Trial

The six-month trial, which involved over 500 existing O2 customers, took place across London using a Nokia 6131 NFC mobile phone installed with the O2 Wallet application. Just like a normal wallet, this held various everyday cards, including Oyster and Barclaycard Visa payWave, but in virtual form. The trialists were able to use their Nokia 6131 handset to pay for travel on the Tube, buses and trams across London and also top-up their Oyster at Oyster ticket machines.

The Barclaycard Visa payWave payment application was also installed on the handset, enabling trialists to make ‘contactless’ payments for £10 and under at the growing number of retailers across London including Books Etc, Chop’d, Coffee Republic, EAT, Krispy Kreme, Threshers and YO! Sushi. As well as making payments, participants could also use their Nokia 6131 NFC mobile phone to locate local retailers.

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