O2 is set to join the growing band of telcos bidding to grab a slice of the mobile payments market when it applies to the UK's FSA for an e-money license later this year.
The Telefónica subsidiary set up a personal finance unit in 2009 and partnered high street bank NatWest to launch Visa pre-paid cards. It has also participated in contactless mobile payments trials for London's Oyster card.
However, the firm is now seeking to gain a licence from the FSA that will enable it to offer financial services and facilitate payments without a banking partner.
James Le Brocq, head, financial services, at O2 told tech site Silicon.com that an e-wallet app will be launched later this year, offering person-to-person monery transfers, mobile commerce and top-up options.
Le Brocq says contactless payments will also be added at some point but, with the necessary terminals still thin on the ground, this is not yet a priority, although he predicts "the Olympics is going to be a significant milestone in the world of contactless".
The news comes days after rival network operator Everything Everywhere revealed plans to team with BarclayCard to launch the UK's first commercial contactless mobile phone payments system this summer.
In the US wireless firms AT&T, Verizon and T-Mobile are banding together on their own contactless mobile payments joint venture called Isis.
O2 mobile wallet to land in second half of 2011 - Silicon.com