- Telefónica O2 is closing its O2 Wallet mobile money service.
- Launched in April 2012, the O2 Wallet was intended to be a comprehensive mobile money offering that included: person-to-person (P2P) payments; the ability to associate bank accounts, credit, and debit cards with the app; price comparison; mobile shopping; and daily offers from partnering retailers.
- The O2 Wallet mobile application was available on iOS, Android, and BlackBerry, and was available to customers from any UK bank or mobile operator.
- Current users will need to withdraw or spend the funds they have in their O2 Wallet account before the 31st of March 2014.
- O2 Wallet followed Telefónica O2's initial forays into mobile money, which began in 2009 with O2 Money, a card-based solution that sent automated text alerts to customers' handsets upon balance changes. In November 2011 O2 phased out its Cash Manager and Load & Go cards to make way for the enhanced O2 Wallet product, which launched in April 2012.
- O2 UK claims it now plans to explore "new and better ways to help people manage their money on the move, both in the UK and abroad".
The O2 Wallet app lacked the necessary focus to do one thing, and do it far better than existing solutions. In the fast-moving cycles of technology product development in general, and in nascent industries like mobile payments in particular, it is critical to begin with a minimum viable product that explicitly solves a pain point for users. Furthermore, because consumers tend to be conservative when it comes to new financial services, operators and nascent mobile money startups should focus on addressing the needs of core early adopters first, and then, and iterate and improve the service forward from there.
IHS has warned in the past that stored value accounts which have to be regularly topped up by users only work when their usability is significantly superior to competing options. A good example of this is public transit in the UK. The speed at which the Oyster card enables commuters to complete the authentication, payment, and access control cycle at underground stations and buses is significantly faster, smoother, and more flexible than other payment solutions, including NFC-enabled debit and credit cards.