Everything Everywhere, the UK's largest mobile operator and combined entity of Orange and T-Mobile UK, has signed a five-year partnership with Mastercard to develop mobile payment solutions.
One of the first products to launch through the partnership will be a co-branded pre-paid solution for mobile devices that allows customers to make payments using Near Field Communications (NFC) technology.
Best known in the UK for its use in Transport for London's (TfL) Oyster cards, NFC allows consumers to carry out transactions by simply touching their devices to a point-of-sale terminal in a shop.
The solution builds on the existing Orange QuickTap NFC payments service, also supported by Mastercard, and will reportedly enable Everything Everywhere customers to make contactless payments at more than 100,000 retailers in the UK.
The two companies also plan to offer person-to-person money transfers, loyalty rewards and digital payment services that offer consumers a consistent shopping experience whether they are paying in-store, online or using their mobile device.
Everything Everywhere and Mastercard will also develop services that allow small business customers to accept payments using mobile devices, the companies said in a statement.
"As the use of cash continues to decline, we will be able to provide Everything Everywhere's 27 million customers with an attractive range of new payment services backed by the processing power and security of MasterCard," said Marion King, President of MasterCard UK and Ireland.
The latest report by Juniper Research, released earlier this month, predicts that the scale of global mobile payment transactions will rise nearly fourfold over the next five years to more than $1.3 trillion, driven primarily by sales of physical goods by both remote purchases and NFC transactions.
According to the report, key services such as Google Wallet and VeriFone's POS terminals, as well as the operator-led ISIS and Project Oscar consortia, have bolstered the market for mobile payments. However, it cautioned that for NFC to fulfil its potential, marketing would need to be scaled up dramatically.
"While we are now seeing significant deployments of contactless infrastructure, consumer awareness is extremely low," said Dr Windsor Holden, author of the report. "Thus, it is imperative for all members of the NFC value chain to engage with the public to heighten its profile as a simple, intuitive payment mechanism."
In spite of the predicted growth, sales of physical goods via mobile phones will still only account for around 4% of global retail transactions by 2017, according to the report.