O2 to tender for new financial services provider after parting ways with NatWest
O2 is to begin looking for a new supplier for the technology behind its O2 Money services, after it and current provider NatWest agreed to end their partnership by mutual consent.
Both O2 and NatWest said the decision to part ways is due to different strategic priorities at the companies.
An O2 spokesperson told Mobile News that NatWest has been told to focus on its core banking activities as it goes forward, while O2 is continuing to grow its financial services portfolio.
Mobile News understands O2 has sent out request for proposals (RFPs) to potential new suppliers, which will start a tender process. This will take place over the next year, and will see the services gradually migrated away from NatWest to the chosen new supplier.
In the mean time, NatWest will continue to power O2 Money services, namely Cash Manager and Load & Go, until a new provider is appointed, which the O2 spokesperson said will maintain services for existing customers.
In a joint statement, O2 and NatWest said: “O2 and NatWest have agreed that O2 will migrate the service to a new provider.
“O2 and NatWest are committed to the continued growth of O2 Money but they also recognise that each companies’ priorities and strategic goals are now different.
“The O2 Money cards will continue to be marketed and the migration to the new provider will take place over the next year to ensure minimal disruption to existing customers.”
Datamonitor analyst Gilles Ubaghs said the parting of O2 and NatWest could slow the operator’s expansion of near-field communication (NFC) technologies as the financial markets remain under pressure.
Ubaghs said: “We expect that the widely expected move into NFC and mobile-based payments will now be delayed for O2, as with the banking industry still under pressure, convincing a new player to make the required outlay could prove difficult.
“This leaves only Barclaycard and Orange intending to launch a mobile payment product. But with O2’s plans now in doubt there is a possibility that it could be delayed because a launch by just one player is likely to struggle to gain widespread acceptance by both consumers and merchants, similar to the sluggish roll-out of contactless payments so far.”
However, O2’s spokesperson said the deployment of potential NFC products are unaffected by the decision to part company with NatWest as its agreement with the bank only covered the two existing financial products and the operator’s strategy had always been to go to tender to find the most suitable supplier for other services.
This is in contrast to Orange, which has struck a strategic partnership with Barclaycard to develop a range of mobile, financial and payment services, and is understood to be taking a one partner approach to financial services. Orange has recently trademarked ‘Orange Cash’ across a number of financial products and services as it looks to grow its product portfolio.