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02 to enable mobile phone payments

02 is planning to launch an app which allows customers to make payments via mobile phones, it has been revealed.

The mobile phone firm has applied to the Financial Services Authority (FSA) for a licence to operate a ‘Near-Field Communications’ (NFC) Network. NFC technology can send and receive information between distances of up to four inches, to enable payments to be processed.

Customers will be able to open a “virtual wallet” account which allows them to use their mobile phone to buy things and make payments. The planned service will be available to non-02 customers as well as those on the network. It is believed it will launch in the second half of 2011.

James LeBrocq, O2’s managing director of financial services, said the app was about bringing the attributes of the real wallet to the mobile phone. He said it would incorporate debit and credit cards, cash and loyalty cards.

The app proposal comes after Everything Everywhere last week announced it would be rolling out a virtual payments system in partnership with Barclays. Gerry McQuade, chief development officer of Everything Everywhere, said that mobile payments systems marked a “revolution” in the way people make everyday purchases. He said the development was as important as ATMs and credit cards.