O2 mobile wallet app launches text message payments

Mobile network O2 has launched a smartphone app that allows users to transfer up to £500 via text message.

It also allows customers to “digitise” their debit and credit cards to speed up purchases from online stores.

The firm also intends to allow users of phones with near-field communication (NFC) chips to make contactless payments in high street shops.

It is the latest of several firms to charge retailers a transaction fee for making it easier to shop.

The service will be free to consumers at first, but O2 said that it would charge 15p for each money message sent by text at a later date.

The network provider said that more than 100 retailers had agreed to accept payments from the service. They include Debenhams, Comet, Sainsbury's Direct and Tesco Direct.

Users can also benefit from a search facility that compares how much goods cost, the ability to load money onto the app from their debit cards and a “transaction history” that keeps track of what they have spent.

The firm said it had held off introducing contactless payments as only a handful of retailers had installed the necessary systems.