Orange has launched a prepaid credit card in the UK, branded Orange Cash and backed by MasterCard, while from today the Irish can get hold of an O2 Money card.
The plastic cards are contactless, and so can be used by waving them near a reader, but both launches are really about sticking a toe into the financial waters, and testing the business models before they get virtualised into the memory of a mobile phone.
Prepaid credit cards aren't new, but have never been very widely used in the UK. It's basically a debit card with its own account, money is instantly deducted from the prepaid balance, and the card stops working when the money runs out. But unlike a debit card you have to pay for the card (£5 and €5 respectively) and to top it up too. Rates vary between a free top-up in an Orange store, to £1.50 to top up Orange Cash in a Post Office, right up to €2.99 to stick €300 into an O2 Money card at an O2 shop.
O2 Money is capping its card at €350, but you can stick £5,000 into Orange Cash, though to do that from a credit card will cost you £200 (4 per cent) even if you are in an Orange store.
So why would anyone want one? It can be handed over to unreliable relatives and topped up with a monthly allowance, and is intended to remove the reliance on the small chips of metal that we're carrying around these days.
But to the network operators, they're also a step towards pay-by-mobile technologies. Everything Everywhere has made it clear that it will be launching on-phone payments this year, and O2 Money has similar, if less explicit, intentions. Both these products will evolve into downloadable applications for NFC (Near Field Communications) handsets, and soon. The next question is: will there be a Google Checkout or iTunes application for them to compete with? ®