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Pay-by-bonk on the blink: O2 loses Wallet

Let's dig down the back of sofa. Maybe we'll find a few customers too

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UK mobile network O2's Wallet was supposed to be the start of its move into the banking biz, with your mobile phone playing the role of bank card.

The service grew out of the 2007 trial of NFC which found that if you give people free money they enjoy spending it.

But it turns out that people aren't that keen when it is their own money, and O2 has announced that it is closing the Wallet service. How this will affect the people of the Welsh village of Rhiwbina remains to be seen.

The rumours are that the number of active users were tiny.

This isn't the first time the UK network, which is owned by Spanish telecommunications firm Telefonica, has played hokey-cokey with mobile money. There was the O2 credit card, which lasted a year until NatWest pulled out. Like Wallet, Money was announced as a stepping stone to NFC. Like Wallet it never happened.

The big difference between Money and Wallet was that while Money relied on a bank to do all the regulatory stuff, Wallet was born out of O2 getting an EU Electronic Money Institution licence – something Vodafone had explored and decided against.

O2's Wallet service started in April 2012 and will be shutting just shy of its second birthday. O2 will, however, need some kind of wallet to support its participation in Weve, the mobile marketing operation which sees it in bed with EE and Vodafone and which provides a standard platform for companies which want to sell stuff to mobile users.

The Weve platform is based around analytics as well as payments but works by enabling the wallet - which the operator or bank brings to the platform.

Last summer Telefonica announced that it was working with Monitise, and that work could yield another shot at a wallet, but whatever happens they will need one for Weve, and that's important because it is billed as a stepping stone to ubiquitous NFC use. (Though we won't be holding our breath for that to catch on). ®

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