So how does the O2 Wallet stack up?

Yesterday O2 launched its mobile wallet, the first of its kind in the UK and a window into the future of all business. See CBR’s original story here for a rundown of its functionality.

Put simply, the set up is exhausting. It took me several hours of juggling debit/credit cards, bank statements, phone calls to customer service and cross referencing passwords, email addresses and god knows what else. As an O2 customer, the O2 Wallet account set up clashed with other aspects of my O2 phone account, and my partner’s account, which suggests there are still bugs to be ironed out here. The customer service rep informed me that others had been having the same problem.

Potential users: let’s just say you better be ready to remember another 3-4 passwords in your life, alongside your bank ones (CBR readers know already that we aren’t the biggest fans of the banking industry’s approach to new technologies)… And no, O2 Wallet will not let you use the same passwords for anything – you will have to have a transaction password, a log in PIN, a something password, and a something-something-something password.

I promptly wrote them all down on a piece of paper during the setup – especially since the next phase of the set up starting asking for the 3rd, 5th and 8th letters of my newly created password. I imagine most users would then take this piece of paper covered in passwords and place it in their wallets. The exact opposite of security.

When is the financial services industry going to realise that more passwords is not the answer?

You will then need to add your cards (twice actually, since after entering all your card details Verified by Visa kicks in for another round of verification), then you will need to add your bank accounts (which involves O2 sending minute transactions to your account, which you then enter as a password into the app), which in my case as an HSBC customer (shudder) will involve another daft round of Secure Key password entry.

And god help you if you have fat fingers and accidently bump the wrong button – any error in the set up process sends you right back to the beginning (i.e. entering a verification code incorrectly, or bumping cancel instead of continue)


As horrendous and time consuming as the set up is (several hours actually – as you wait for various verification texts, bank transactions etc.), once completed it is an immaculately designed app, very simple to operate; clean and elegant like a traditional Apple app.

(Note: the version tested was running on an iPhone 3GS – although O2 Wallet is compatible with Android and Blackberrys too)

Transferring money to friends and family is done via SMS – a message will appear in their inbox with the sum requested/granted – if they aren’t signed up to the O2 Wallet, they then need to go through the aforementioned set up process.

What is very disturbing about this feature is that after sending the message you have two options – ‘Continue’ or ‘Post to Facebook’. Yes, you read that correctly.

This I can’t fathom – who on earth would want their personal financial transactions posted on Facebook? Its one of the more inexplicable Facebook integrations I’ve ever seen and concerning in terms of privacy. I have to assume it doesn’t list the amounts processed, but simply lists ‘Allan is using O2 wallet to pay Steve – check out’ or something to that effect. I imagine Steve is unhappy at looking like a freeloader.

I’m sorry O2, I don’t like this one bit.

Shopping is fine, but not any different to typing a product into Google and getting a ranking of cheapest offers – which most smartphone users can do via the web browser. Payment for a product will still go through verified by VISA. Sigh.

The vouchers (‘My deals’) are useful, but again no any different to Groupon or LiveSocial style offers.

A potentially useful application is the barcode scanner – which means shoppers can scan the barcode of a product in the shop, and the app will bring up a list of prices on the web. The barcode scanner itself is a bit iffy however – it really does not like any barcode that isn’t taller than a centimetre. It just doesnt pick them up.

It also doesn’t seem particularly accurate – scanning a few items around my desk, including Wired Magazine, a can of Diet Coke, Steve Jobs’ biography, Duracell batteries and a case of Kronenberg (for after work purposes of course) – only the Coke, Jobs and Duracell scanned. Two of them accurately, but unfortunately O2 Wallet seemed to think the Diet Coke was an Xbox 360 game called Crackdown.

Again, the problem with this kind of feature is that it needs to be very fast, and very accurate – otherwise why not simply type ‘Steve Jobs biography’ into Google and view the results? I spent minutes attempting to get the barcodes to scan. As brutal as it sounds, I have to say that either the app is broken, or the iPhone 3GS camera is not up to the task. Given the Duracells scanned instantly (and correctly) I have to assume the former.

So far, I have to rate the service a C+.

To be honest, this looks like an app waiting for NFC. The strange thing is, there are already some smartphones available with NFC (the Samsung Galaxy SII springs to mind), that could be presumably used in the same way Barclay’s cards with Visa Paywave do – to pay for coffee and newspapers at Starbucks.

Yes the retail offerings are limited currently, but most major franchises and chains are in the process of rolling out NFC, and the next Apple iPhone will presumably incorporate NFC technology.

O2 has said it plans to add NFC compatibility, and until it does this will be a great tech demo. It leaves me salivating at the prospect of using such a nice clean interface to pay for small goods in the physical world. The O2 Wallet could become a killer app when this happens.

Currently though, it remains average. Looks great, does what it does well, but feels unfinished. Purchasing items online, say, through the iPhone Amazon App, offer a comparably quick and efficient experience, without the laborious set up process.

I pity O2, because a lot of the set up hurdles for the app appear to be more to do with Visa and the banks than their own processes.

Similarly, the lack of NFC also has a lot to do with limited retail hardware support and limited device selection. As a result, unless you need the functions such as money transfers (which can be done via PayPal), I can’t really recommend going through such an exhaustive set up process until NFC capability is added.

It’s a brave call by O2 to launch without it, and I have to respect a bit of bravery in a very timid market sector. Hopefully we will see some Olympic tie ins and some innovative use of the app outside of its core functionality, especially with the Olympics later this year.

Type: White Paper


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