O2 is Getting Out of Branded Mobile Wallet Business

O2 Wallet was among the earliest branded mobile wallet offers available to consumers in Western Europe. But O2 now has decided to shutter O2 Wallet, citing unspecified changes in the market.

Given delays in growth of the near field communications market, namely a critical mass of handsets and terminals, plus retailer support, the O2 Wallet was designed to work without requiring use of NFC. 

But a viable wallet effort requires scale, something most other competing ventures also are struggling to create. Starbucks, using its captive customer base, had immediate scale. 

And Square, which has focused instead on mobile retailer terminal services allowing smaller merchants to take credit card and debit card payments using a smartphone, or tablet, have thrived because the infrastructure is largely in place.

All a retailer must do is supply a compliant smartphone or tablet device, and have Internet access, to use Square. That sidesteps the scale problem. 

The scale is provided by consumers who are used to using credit cards and debit cards to pay for purchases in retail environments; by merchants who already have incentives to take such payments; and by low-cost terminals people know how to use. 

O2 simply has run into the scale issue, head on. 


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