O2 announced the launch of the UK’s first large scale pilot of NFC (Near Field Communications) technology on mobile phones.

The trial of the O2 Wallet paves the way for the mass market use of mobile phones to pay for purchases, access events or even be used as Oyster cards for travel around London, by touching the phone to a reader.

The trial, which involve over 500 people invited from the O2 customer base, takes place across selected sites throughout London and began on 28th November 2007 running for six months until the end of May 2008.

NFC is a contactless functionality, enabling a wide range of secure uses including cashless payments, public transport and event ticketing, and smart posters. In order to make this as comprehensive a pilot as possible, O2 has brought together a broad range of partners, including Transport for London, TranSys, Barclaycard, Visa Europe, Nokia and AEG.

Each trialist will be given a Nokia 6131 NFC handset installed with the O2 Wallet. Just like a normal wallet, this will hold various everyday cards, including Oyster and Barclaycard, but in virtual form and with NFC functionality. Trialists will be able to test a wide range of different services in London, such as making purchases in retail outlets and travelling on London’s public transport system. All participants will be asked to provide feedback on the services featured in the O2 Wallet evaluating its ease of use, security and overall usefulness.

Accessed from the phone’s main menu, the O2 Wallet shows all the NFC services available on the handset in addition to information about each service and customer support.

All 500 trialists will have Oyster on their phone enabling them to use their handset to pay for travel on the Tube, buses and trams. They will also be able to top up their Oyster by touching their handset on Oyster ticket machines in tube stations or at Oyster ticket stops. If a trialist’s phone rings, they can still answer the call and continue to make a transaction. A call or text message will not interfere with the NFC service.

Trialists will also be able to touch the NFC-enabled handset on selected smart posters at the launch and at other locations over the course of the trial. The smart posters contain embedded tags which serve as shortcuts for services enabled through the handset. Once the user taps the poster with the handset, they will automatically dial a number, send a text message or be sent a shortcut to a mobile internet site with more information about the subject on the poster e.g. an event taking place or downloading content.

The trial will also examine mobile payments using the Barclaycard payment application in the O2 Wallet. A subset of trialists will be able to use the growing number of ‘contactless’ payment readers at retailers in and around London to purchase goods for GBP 10 or under. They will simply need to tap their phones on the secure reader and transactions will be completed in a matter of seconds. In the initial phase of the trial, Barclaycard will credit each phone with GBP 200 worth of non-reloadable funds which trialists can use and spend as they see fit at any participating retailer. As well as making payments, they will also be able to use the phones to check available funds and to locate retailers close to them that accept ‘contactless’ payments.

Cath Keers, Customer Director, O2 UK continued: “This trial is going to provide insights which will prove crucial to getting the customer experience right as we bring NFC on mobile to market. But the trial is just the start of this journey. For this to work we will need the whole ecosystem to come together which means mobile operators, banks and retailers all working together to fulfill a shared vision. If we get this right we can place the UK at the forefront of technology innovation.”