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02 and NatWest split could mean delay for NFC and mobile payments

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The recent breakup of the partnership between RBS-owned NatWest and Telefonica’s O2 could call into question future developments in mobile payments and near field communications (NFC) in the UK suggest analysts at Datamonitor.

Gilles Ubaghs, analyst at Datamonitor tells us: “O2 will continue to market their O2 Money prepaid cards to new customers, for which they claim to have received over 100,000 applications for in the first few months of its launch.

“But we expect that the widely expected move into NFC and mobile-based payments will now be delayed for O2, as with the banking industry still under pressure, convincing a new player to make the required outlay could prove difficult.

“NatWest’s move away from its joint venture with O2 is likely due to the wider difficulties with government-owned RBS. With austerity becoming a growing concern in the public sector, NatWest’s focus on its core services is perhaps unsurprising.

“This leaves only Barclaycard and Orange intending to launch a mobile payment product. But with O2’s plans now in doubt there is a possibility that it could be delayed because a launch by just one player is likely to struggle to gain widespread acceptance by both consumers and merchants, similar to the sluggish roll-out of contactless payments so far.”

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