Orange and Barclaycard Launch UK’s First Mobile Payment Service

When Barclaycard introduced the credit card to the UK over forty years ago, it revolutionised the way we shop. Admittedly, it didn’t take hold overnight (in fact the original idea was nearly 60 years old at that stage), but 62% of the UK population now carry at least one card, and they account for more than 80% of purchases of over two hundred pounds – where carrying that much cash is decidedly risky.

Now Barclaycard has teamed up with Orange to begin the next revolution. The Quick Tap service is now available at more than 50,000 retail outlets around the UK, and for the first time, shoppers will be able to use their mobile phone to pay for goods and food.

The system revolves around Samsung’s Tocco Quick Tap – a mobile phone available for £60 – and more specifically the NFC card fitted inside it. Near-field communication uses magnetic induction between two antennas to convert the mobile handset into a contactless bank card. The benefits of the system are clear: firstly it’s extremely convenient, meaning users will no longer have to take their wallet wherever they go; and secondly, users will be able to track their spending using a built-in application on the phone.

Users currently signed up with Orange can buy the phone and activate the NFC card by transferring up to £100 of credit onto it. This credit can then be used to pay in outlets including Pret a Manger, McDonalds, EAT, Subway, and Wilkinson. Security measures include an optional PIN for purchases and a limit of £15 per transaction.

Of course, it isn’t necessary to run out and buy this particular model and sign a contract with Orange just yet. Market analyst Robert Cottrell expects the system to be a success, but stresses that patience will be a factor as the system evolves: “O2 is already planning to roll out a similar system before the year is out, and Vodafone and T-Mobile are sure to follow suit, but there’s still a long way to go before mobile payments establish themselves in the consumer psyche.”

Ironically, the biggest threat to this new technology is the ubiquity of the current technology, with many retailers questioning the need for such a system when credit cards have been such a huge success. Indeed, some view the Quick Tap service as a dangerous gimmick, increasing the value of your mobile phone  (by effectively storing money in it) and thus increasing the risk of it being stolen. As the system evolves, it will be vital that security measures keep up.

For the time being, most analysts agree that Barclaycard has taken an important first step. They are currently promoting the system by offering £10 credit on your SIM card Barclaycard when you activate it, and 10% cash back on all purchases made during the first three months.

Don't forget, you can get mobile phone insurance with Protect Your Bubble.