Tapping a smartphone on a card reader to pay for a sandwich or a bus journey could soon become an everyday event, under a scheme unveiled on Thursday by Vodafone, O2 and EE.
Paypal and Google, as well as banks and mobile operators, have been trying for years to create mass market mobile phone payments systems, so far without much success.
Now Weve, a joint venture formed by Britain's three largest mobile operators to create advertising and payments platforms, has become the latest group to put forward a plan to make the technology a reality.
It has announced a partnership with Mastercard, which is building a payments system that links bank cards to the SIM cards installed in every smartphone. The partners are preparing to market their system to banks wanting to offer their customers the service, under their own brand.
Customers of Barclays, for example, would be able to link their card to their phone using the Barclays app, after which the handset can make payments at tills with contactless readers already used for debit and credit cards.
Some 300,000 shops now have contactless readers for small payments, with Marks & Spencer recently joining Starbucks and sandwich chain Pret A Manger in using the technology. They are also installed on buses and on the London underground, and are being issued as standard with all new tills.
Mobile phone companies will also use the service for their own smartphone 'wallets' – Vodafone is launching a payment service and Orange already has Quick Tap.
Not all SIM cards work for contactless payments, but those that do are now being issued with most new smartphones and should be in the majority of handsets by the end of 2015.
"Mobile payments are the thing that everybody's talked about but nobody's managed to do," said Weve chief executive David Sear. "It's been a mess. We bring scale and people with mobile devices. Mastercard is doing the same for bank customers – one infrastructure provided by Mastercard talking to one infrastructure provided by us."
Weve believes it will succeed because it has access to 80% of British consumers via their phones. Three, the smallest mobile operator, is not a member, but represents fewer than 10% of subscribers.
Having one group representing the mobile networks and one representing the financial services industry would reduce the costs tenfold, said Sear, by cutting the number of potential players involved from around 15 to two.
A successful platform could bring rich rewards – the mobile groups behind Weve hope to take a commission on payments from the banks, although the terms have yet to be decided.
