O2 has cut the transaction fees for its ‘Charge to Mobile’ service, which allows online shoppers to make payments using their mobile phone accounts, in order to drive adoption.

nnounced a new ‘Charge to Mobile’ service, that allows customers to make payments using their mobile phone accounts.

Mobile billing is already supported on all the main UK mobile networks through a cross-platform framework called ‘Payforit’. However, O2 says that merchants will receive a larger proportion of the transaction,

Mobile operator O2’s new ‘Charge to Mobile’ payment option will allow merchants to charge payments to users’ mobile phone bills or pre-paid credit without having to register credit card details.

Whether buying digital services from a website, mobile site or within an application, consumers on internet-connected O2 devices will be able to pay for goods or services up to £30 using the new payment option.

Mobile billing is already supported on all the main UK mobile networks through a cross-platform framework called ‘Payforit’, which allows merchants to incorporate mobile billing as a payment method.

In a statement, O2 said it would be increasing its pay-out rates to merchants, giving them a larger percentage of each transaction than rival mobile billing services in order to boost adoption of its platform, which will be available to all of its consumers when launched later this year.

Merchants will be able to connect to O2’s new billing platform through one of several accredited payment processing companies using an application programming interface (API), which will also allow merchants to charge consumers on other mobile networks.

O2, which is owned by Spanish telecom operator Telefónica, said its Charge to Mobile payment option would enable an increased range and flexibility of pricing for merchants while allowing them to issue refunds to users.

Information Age has contacted O2 to enquire if its new mobile billing service will pose any security issues and is awaiting comment.

“This is a market where the key pieces of the jigsaw are starting to come together. Firstly, where mobile billing has been supported as an additional payment option, we have recently seen examples of merchant revenue increasing by over 200 per cent,” said Danny Barclay, head of interactive at O2 media.

“We foresee further examples of this type of increase, particularly as Internet usage through the mobile phone becomes more prevalent and we expect more and more merchants to take advantage of mobile billing in order to commercialise their goods and services,” Barclay said.