FMCG & Media: Project Oscar
The UK’s largest mobile operators are due to submit plans for a mobile payment system for European regulatory consideration next week, though they face continued opposition from rival company Three.
Everything Everywhere, Vodafone and O2 hope to gain EU approval for the joint mobile payments platform in the UK, code-named Project Oscar, which would allow them to launch mobile wallets for UK customers. Historically, telco companies have been reluctant to co-operate, but creating a common platform for retailers and advertisers makes sense for operators, according to Chris Alliott, senior telecom analyst at RBS.
Speaking on the FMCG & Media panel this week, Alliott explained that this is an opportunity to add incremental value if mobile operators can get it right. Key benefits for mobile operators include the flexibility to promote their own wallet and create brand loyalty with promotions and coupons; and the potential for a slice of the action in terms of advertising revenue.
A standardised platform should be appealing for advertisers, giving them a huge reach and the chance to target individuals based on their shopping habits and location, although there are privacy issues with consumers’ data – who owns it and whether customers can opt-in. The clear reason for customers to sign up is that it makes it easy for them to pay for items and receive relevant discounts and coupons.
Claire Valoti, managing director of O2 Media, suggested that the Starbucks app for example has the scope to go beyond loyalty to placing orders for regular customers (providing they are a creature of habit) and allowing them to pay with one swipe.
This does of course rely on retailers signing up and implementing the new technology – it makes products more accessible but there will be an upfront cost for the equipment to make this possible.
It is still unclear whether payments would go straight onto your mobile bill or added to your visa bill. It is also unclear how advanced Project Oscar actually is, although if the technology is in place and agreements have already been provisionally signed, once (and if) they get approval they should be able to move quickly to roll this out. There was talk of a year to 18 months. It has been said that the operators are keen to launch before Google Wallet.
According to Alliott, this project has the greatest potential to be pulled together and delivered within a reasonable time frame. He believes it will be a driver for mobile advertising – calling it “an appealing prospect for both advertisers and retailers”.