O2 has announced the launch of the UKs first large scale pilot of NFC (Near Field Communications) technology on mobile phones. The trial, which will involve over 500 people invited from the O2
customer base, takes place across selected sites throughout London. It
begins on today, and runs for six months until the end of May
2008. The company says the trial of the O2 Wallet paves the way for the mass market use of mobile phones to pay for purchases, access events or even be used as Oyster cards for travel around London, simply by touching the phone to a reader.
Research shows that people are more likely to return home if they leave their phone behind than their wallet or keys, says Cath Keers, O2 UK Customer Director. So why not have your wallet on your phone? We believe that NFC technology is going to fundamentally change the way people use their mobile phones.
NFC is a contactless functionality, enabling a wide range of secure uses, including cashless payments, public transport and event ticketing, and smart posters. In order to make this as comprehensive a pilot as possible, O2 has brought together a broad range of partners, including Transport for London, TranSys, Barclaycard, Visa Europe, Nokia and AEG.
Each triallist will be given a Nokia 6131 NFC handset installed with the O2 Wallet. Just like a normal wallet, this will hold various everyday cards, including Oyster and Barclaycard, but in virtual form, and with NFC functionality. Trialists will be able to test a wide range of different services in London, such as making purchases in retail outlets and travelling on Londons public transport system. All participants will be asked to provide feedback on the services featured in the O2 Wallet, evaluating its ease of use, security and overall usefulness.
Accessed from the phones main menu, the O2 Wallet shows all the NFC services available on the handset in addition to information about each service and customer support.
All 500 triallists will have the Oyster card on their phone, enabling them to use their handset to pay for travel on the Tube, buses and trams across the Capital. They will also be able to top up their Oyster by touching their handset on Oyster ticket machines in tube stations or at Oyster ticket stops. If a triallists phone rings, they can still answer the call and continue to make a transaction. A call or text message will not interfere with the NFC service.
Triallists will also be able to touch the NFC-enabled handset on selected smart posters at the launch and at other locations over the course of the trial. The smart posters contain embedded tags which serve as shortcuts for services enabled through the handset. Once the user taps the poster with the handset, they will automatically dial a number, send a text message or be sent a shortcut to a mobile Internet site, with more information about the subject on the poster, such as an event or a content download.
The trial will also examine mobile payments, using the Barclaycard payment application in the O2 Wallet. A subset of triallists will be able to use the growing number of contactless payment readers at retailers in and around London to purchase goods for 10 or under. They will simply need to tap their phones on the secure reader, and transactions will be completed in a matter of seconds.
In the initial phase of the trial, Barclaycard will credit each phone with 200 worth of non-reloadable funds which triallists can use and spend as they see fit at any participating retailer. As well as making payments, they will also be able to use the phones to check available funds and to locate retailers close to them that accept contactless  payments, including Books Etc, Chopd, Coffee Republic, EAT, Krispy Kreme, Threshers and YO! Sushi.
The partners are keen to extend the payment functionality delivered to triallists as part of the O2 Wallet, and are actively discussing the opportunities to develop the trial service further in 2008. Possible developments include PIN capability, purchases over the current 10 limit, and reloadable/credit funds capability.
AEG Europe, which operates The O2 venue, will also be looking into how the NFC handset can be used to enhance the customer experience at The O2. All triallists will be able to use their NFC handsets to gain entry into the blueroom the exclusive bar for O2 customers and guests at the venue. The experience will be managed by O2 Angels, whose own NFC handsets will display the name of the triallists, enabling a personalised greeting into the blueroom.
This trial is going to provide insights which will prove crucial to getting the customer experience right as we bring NFC on mobile to market. Says Keers. But the trial is just the start of this journey. For this to work, we will need the whole ecosystem to come together, which means mobile operators, banks and retailers all working together to fulfil a shared vision. If we get this right we can place the UK at the forefront of technology innovation.