Feeds

O2 gets into banking business

Time to talk money

Choosing a cloud hosting partner with confidence

O2, the UK brand of Spanish network operator Telefonica, has got into bed with NatWest Bank to launch two payment cards, as it expands into financial services.

The operator has announced the launch of two pre-paid credit cards under the "O2 Money" brand: one for children (Load & Go) and one for grown ups (Cash Manager). Both are backed by Visa and managed by NatWest for use anywhere that accepts a normal credit card, with certain restrictions on the Load & Go variety.

O2 Pre-Paid Credit Card

What could possibly go wrong?

Both services allow you to take money from your current account, where it was earning interest, and give it to O2, who will pay you nothing but at least won't charge you for looking after your money in this way. The operator helpfully suggests you might keep money for rent and bills in your current account while transferring your disposable income to your Cash Manager for them to roll around in look after until you spend it.

Load & Go is slightly more interesting in that it, supposedly, can't be used to access adult services such as gambling, whether in shops or over the internet. It will be interesting to see how effective that is, but the attempt is laudable.

The move is not as much of a surprise as one might imagine - mobile phone pre-payment systems have long attracted the eye of the regulator, who views them as banking-without-paying-interest services rather than "payment tokens" as the operators would paint them.

The problem with pre-paid mobile credit is in what it can be used for: gift tokens are not currency, as they can only be used at a specific shop or for a specific product, so the regulator isn't interested. Mobile phone credit is supposed to be used to pay for phone calls, but these days it can be used to buy music, games, access to web sites, and participate in television voting. This puts the operator into the role of an unregulated bank, a situation which was never going to last.

So all the UK operators have plans to partner with banks, or become banks themselves, eventually. O2 is just the first, and while this launch is unrelated to their mobile phone prepayment systems, a connection will be forthcoming.

This move risks reminding prepaid customers that sitting on their credit is a nice little earner for the network operators, and one has to wonder if someone will make the jump to paying interest on pre-paid mobile phone accounts, though that assumes that interest rates will rise enough to make it worthwhile. ®

Intelligent flash storage arrays

More from The Register

next story
FCC, Google cast eye over millimetre wireless
The smaller the wave, the bigger 5G's chances of success
It's even GRIMMER up North after MEGA SKY BROADBAND OUTAGE
By 'eck! Eccles cake production thrown into jeopardy
Mobile coverage on trains really is pants
You thought it was just *insert your provider here*, but now we have numbers
Don't mess with Texas ('cos it's getting Google Fiber and you're not)
A bit late, but company says 1Gbps Austin network almost ready to compete with AT&T
prev story

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.