Everything Everywhere To Launch Mobile Payments

Everything Everywhere – the combined entity of UK mobile operators Orange and T-Mobile – has unveiled plans to roll out a mobile payments service, which will enable customers to use their phones to pay for goods and services in shops around the country.

The service, provided by Barclaycard, uses contactless mobile payment technology based on the phone’s SIM card. Users will initially be able to purchase items up to the value of £15 by simply swiping their mobile phones across an electronic reader.

The phone uses “Near-Field Communication” (NFC) – a technology that can beam and receive information at a distance of up to 4 inches – to process the payment. A report from Bloomberg yesterday revealed that Apple’s next-generation iPad and iPhone will feature the same payment technology.

“This is the beginning of a revolution in how we pay for things on the high street. It’s a cultural shift that is as important as the launch of the personal credit card or ATMs,” said Gerry McQuade, chief development officer of Everything Everywhere. “We’re making something that’s been talked about for many years a reality and very soon, using your mobile to buy a sandwich, a cinema ticket or in time, even something bigger like a computer will simply be the norm.”

‘Convenient and secure’

While some have warned that mobile payment increases the risk of fraud, Everything Everywhere claims that its SIM-based approach ensures enhanced security for customers. The system is protected by SIM card maker Gemalto’s Trusted Service Management operated services.

Barclaycard and Orange announced their strategic partnership to bring contactless mobile payments to market in 2009. The two companies already offer a contactless co-branded credit card, and are planning to release a contactless Orange Cash prepaid payment card in the near future.

“I believe that future generations will find it surprising that early this century we were still carrying separate items to buy goods and to communicate with each other,” said David Chan, CEO of Barclaycard Consumer Europe. “As payment experts, our role is to make it easier, more convenient and incredibly secure for people to make purchases and manage their money while on the move.”

The Everything Everywhere service is expected to be rolled out by early summer 2011.

Apple to spur NFC adoption?

Mobile phone maker Nokia has been pushing NFC adoption for years, but the technology has been fairly slow to take off. However, according to Richard Doherty, director of consulting firm Envisioneering Group, Apple’s entry into the mobile payments market could be a game changer.

In December, industry analysts iSuppli also predicted that the use of mobile devices for payments would begin to take off in 2011, with 2012 being a ‘make or break’ year for the technology.

There are currently 11.6 million contactless credit and debit cards in circulation, and 42,500 live Barclaycard contactless terminals in retail outlets including Pret a Manger, EAT and Little Chef. Google, Apple, Research In Motion and Nokia are all now building NFC into their future smartphone handsets.

“News that Orange is teaming up with Barclaycard should act as wake-up call for the rest of the industry,” said Fred Huet, Managing Partner of Greenwich Consulting UK. “While we’re still several years away from cash losing its dominance and physical debit and credit cards becoming redundant, the shift towards mobile phone payments is only going to accelerate in the coming months.

“Operators that can achieve scale stand a good chance of owning the customer relationship and defending against handset and third party led approaches that could marginalise them. Mobile payments is a phenomenon in other geographies, and brands and retailers not already investing in NFC need to act swiftly to position themselves in this emerging ecosystem,” he added.