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Telefónica O2 UK today announced some of the companies it will work with to bring its O2 Money prepaid service and mobile wallet to market on NFC phones and contactless cards this year.

O2, which plans to become a payment service provider and issue the prepaid application itself, will work with Visa Europe, as expected, to provide the retail payment network and acceptance brand for the O2 Money service. That applies to both O2 Money applications on NFC phones and on the contactless cards O2 plans to launch in coming months.

O2 also said it would work with prepaid program operator Wave Crest, which is based in Gibraltar; U.S.-based transaction processor FIS; and wallet software provider Intelligent Environments of the United Kingdom for the O2 Money prepaid program, both on NFC phones and cards.

Plans still call for a commercial launch of the O2 wallet during the second half of 2011, said the telco. Besides NFC-based payment, O2 will also offer subscribers mobile commerce, top-ups of mobile airtime, and network-based peer-to-peer payments.

“We will have more announcements to make in coming months with different parties we’ll work with,” an O2 spokesman told NFC Times of the mobile-commerce and other additional services.

But the telco’s own O2 Money prepaid application will anchor the wallet. The telco plans to apply for an e-money license with UK financial regulators, which would permit it to store the funds for the customers’ prepaid accounts and to issue the application and cards. If by chance it doesn't get the license, O2 would also bring on an issuing partner.

But that partner would not be a major UK bank. O2 seeks to become a payment service provider in its own right, using its financial services arm, O2 Money. It had partnered with NatWest bank to issue two prepaid O2 Money cards launched in 2009, along with Visa.

The telcos said existing O2 Money customers will be given the chance to be issued the new contactless cards, expected later this year. The O2 money cards on issue today do not have a contactless interface.

While it will seek to promote the O2 Money payment application, the telco is expected to open its mobile wallet to banks for their contactless credit and debit applications.

“It’s certainly our intention in the longer term,” the spokesman told NFC Times. “We can see (for this) really to take off with customers, customers are going to want to use their existing banks.”

Rival UK operator Everything Everywhere, which plans an NFC launch this summer, is also expected to introduce its own prepaid payment service for its mobile wallet, probably based on the contactless Orange Cash cards it launched earlier this year. It is partnering with MasterCard Worldwide and UK-based prepaid payment service provider PrePay Solutions, partly owned by MasterCard, for the card launch.

But Everything Everywhere, a joint venture of France Telecom-Orange and Germany-based T-Mobile, will work with banks from the start of its NFC launch. Its first banking partner is Barclays and its Barclaycard arm.