UK to get a new Mobile Wallet Service thanks to Vodafone

Vodafone has developed a mobile wallet service in collaboration with Visa. It would be launching a mobile wallet service in UK market. The service would a special SIM card embedded with NFC. The new service would require a Vodafone user to simply tap for payments at the point of sale. The wallet service would be available for use on London Underground and would even allow P2P payments.

Vodafone is also working with Nectar, a loyalty card company. Vodafone would also bring the wallet technology to banks for use in their own payment services. The wallet service would currently be available on only Android smartphones. Vodafone has already launched such wallet services in Italy, Germany, Spain and the Netherlands with satisfactory results. The payments market is increasingly witnessing mobile operators competing with technology companies as well as financial service groups.

From security aspect, Vodafone’s wallet service is promising because of ownership of SIM card with the operator itself. The customer’s personal information and card details are saved on the secure SIM card itself. In order to avail the service, Vodafone customers would need to replace existing SIMs with NFC-enabled ones and also have a NFC embedded handset. The daily limit on amount to be transacted, via the wallet service, would be restricted to below £25 because of regulatory issues.

Vodafone is expected to introduce a PIN protected way to increase the cap on transaction amount limit. Visa enabled contactless payments have witnessed a 67% increase over last year in UK. The total count of such terminals currently stands at 300,000. The market has also witnessed 111 mn contactless purchases in past one year.

Customers without an NFC enabled phone can also use the service by downloading the Vodafone SmartPass app but they would have to apply for ‘NFC tag’ to be attached to their device. TfL (transit-for-london) also announced that it allow contactless payments on Docklands Light Railway and London Overground as well.

NFC enabled wallet services haven’t received responses that well. In France, Orange cellular has given up on pushing the CitiZi technology. Barclays has also recently announced he termination of Quicktap service. The Vodafone’s wallet service launch is coming at a time when Apple is launching the iPhone 6 and is expected to bring the NFC tech to the next generation of iPhones. If Apple does so, it would really give a ‘shot in the arm’ to NFC technology. One can also expect Vodafone to target new iPhone users if NFC does come into picture.