Q&A: James Le Brocq, O2 Money

James Le Brocq, managing director of O2 Money talks to Marketing Week at the launch of O2 Wallet about the challenge of getting consumers to use contactless payment technology.

MW: O2 Wallet does not include the Near Field Communications (NFC) technology that would allow users to buy products directly using their phone. Will NFC be added later?

JLB: Yes. NFC is a great technology. I think it will underpin payment, coupon redemption and maybe loyalty programmes in the future. It can be used for many things - downloading information data, service discovery - there are a whole host of opportunities for NFC that can be realised by just tapping your phone on a reader or tag. We fully intend to participate in those opportunities.

MW: Was it part of your original plan to include NFC in the Wallet and if so, why has it not been included?

JLB: We said we wanted to launch O2 Wallet before the end of last year. It was always part of the plan. However, it is a complicated technology. I want to be in a position where people can use a card from any bank in an NFC contactless environment. That takes a lot of development. There are security and technology issues that take time to overcome.

I wanted to get the Wallet to market quickly…..But our customers are already wanting to do things with their mobile to shop so the natural first thing you should do is to facilitate that experience and make it better.

MW: Some research has shown that there is reluctance among consumers to embrace contactless technology. What needs to be done to encourage take-up?

JLB: NFC is coming. It is a great technology. People are waiting for some magical tipping point but there will not be one. There will, however, be a number of turning point such as the adoption by TfL of the payment card standard to replace Oyster. If a major retailer said that they will make contactless available in all its stores from tomorrow then that would make a big difference. Then, people would have the opportunity to use contactless on a daily basis. Until consumers have an opportunity to do that, then it is not going to happen.

MW: Should there be a marketing campaign to raise awareness among consumers?

JLB: Subject to the approval of the joint venture (A proposal by Everything Everywhere, Vodafone and O2 parent Telefónica UK to set up a company handling m-commerce and ad sales is currently being reviewed by the European Commission) , the three parties will become clients of the new company. That new company will have the opportunity to accelerate take-up. One of the benefits of working together is interoperability. That scale opportunity is something that will motivate all parties in the NFC eco-system to get their skates on. If the parties in the joint venture turn to major retailers and say we will ‘make sure this happens’ then there might be more [retailers] come on board because it might be easier. There will still be concern [from retailers] over costs of accepting NFC payments - they reckon it’s more expensive than cash - that’s a barrier that needs to be overcome. I think, however, there are benefits in terms of retailer productivity, faster queues, for example.

MW: Could NFC be bypassed by other technology because of the slow pace of development?

JLB: No. There are many technologies out that could aid the development of contactless - barcodes, QR codes, sonic signals - it will take time for the winners and losers to be settled. My view is that NFC will be one of the winners. It is such a convenient technology.

MW: Are you hoping that O2 Wallet will encourage people to become O2 customers?

JLB: Definitely. It one of the businesses’ biggest innovations this year. Before I joined I saw O2 as one of the country’s most innovative brands. I think what we are doing with the Wallet underpins that innovative nature, which people will know about shortly [through marketing activity].

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