CeBIT: O2 gearing up for NFC smartphone services in UK

HANOVER: O2 is to introduce new services in the UK in the coming months, including a wallet application and direct-to-bill and peer-to-peer payment facilities, as the company looks to take advantage of mainstream smartphone use.

The services are already available in countries such as Germany and Kenya, and will be made available to UK customers soon, according to Matthew Key, chief executive of O2 parent company Telefónica, during his keynote at CeBIT.

"Near-field communication will allow people to carry their credit card in their phone and scan transactions. This is fantastic for customers and retailers because it takes a lot of the supply chain costs out," he said.

"We see ourselves being an aggregator of services and payments. As a mobile business we are uniquely positioned. Telefónica across the world has 190 million customers, and we know everyone's payment history and credit references."

Location-based advertising, which O2 has already started using in the UK, is also being tipped to become a "major product line" with the increasing use of smartphones, Key explained.

"Customers can opt to receive a voucher on their mobile phone. We know when a customer is wandering past Starbucks [for example], and can send a barcode asking them if they want to go inside and get 50p off a latte," he said.

"Location-based is customer specific and is win-win. The retailer benefits, the customer benefits and [O2] sits in the middle and benefits as well."