Consumers are able to transfer cash via their mobiles, compare prices, track their spending and shop with the O2 Wallet / Getty Images


A "digital wallet" intended to transform the way people manage their finances and send money using their mobile phones has been launched.

Several functions are being brought together in the app to create the "wallet", enabling consumers to transfer cash via their mobiles, compare prices, track their spending and shop, O2 said.

The O2 Wallet, which is compatible with the majority of smartphones and iPads, is free to download and can be used with any phone network or bank account.

Consumers need to enter a Pin number to access the wallet which includes a "money message" function, enabling people to transfer up to £500 to any UK mobile number "as easily as sending a text".

The product also allows users to compare the prices of goods from more than 100 online retailers, and features a daily offers icon, offering discounts from retailers such as Debenhams and Tesco.

People can use the camera on their phone to scan the barcode of an item in a shop and then use the app to perform a search to see if it can be found cheaper online.

The wallet gives consumers text alerts about their account balances and they can also apply for a physical prepaid Visa account card to go with the service. The Visa card uses contactless "tap and go" technology, meaning customers swipe the card at payment points rather than needing to enter a Pin number.

James Le Brocq, O2 Money managing director, said of the wallet: "We believe it will transform the way people manage their finances and spend money."

Functions for the wallet planned for the future include being able to use it to buy train tickets and make mobile contactless payments.

Those behind the initiative said it has undergone extensive security testing to ensure it is safe, with personal details and financial information held on remote central servers rather than in the mobile phone itself.

Sandra Alzetta, senior vice president of mobile at Visa Europe, said: "This announcement is another step towards an integrated future where the way we pay reflects the full potential of these new technologies."

The launch is the latest in a series of innovations enabling people to use their mobile phones to transfer cash.

Earlier this month Barclaycard launched the PayTag, a sticker which can be attached to the back of a mobile phone to make contactless payments.

Barclays also recently launched the Pingit app, enabling people across the UK to transfer cash using mobile phone numbers, regardless of who they bank with.

Meanwhile, the Payments Council which oversees payments in the UK, is building a database to help banks and building societies offer a service to customers who sign up, enabling them to transfer cash using mobile phone numbers.

This database will be in place before the end of the year.