European operator O2 – part of Spanish and Latin American giant Telefonica – this morning revealed details of its mobile contactless payments strategy and called for greater collaboration between all players.

Andy Ramsden, head of payment products, O2, provided delegates with information on the operator’s NFC trials. In 2008 the operator teamed with Visa, Barclays and Transport for London where consumers used their Nokia handset as an ‘Oyster’ travelcard as part of its O2 Wallet initiative. A year later O2 carried out a university campus trial with Mastercard and Natwest, which Ramsden said catalysed innovative offerings from users. One user developed an application to open and close his dormitory door via the technology. Earlier this year the operator moved on from handset-based NFC trials to SIM-based trials, carrying out a trial at the 2010 GSMA Mobile World Congress with partners Visa and Samsung.

Ramsden also revealed that Telefonica is planning further trials this year; one at Sitges, a small city about 35 kms southwest of Barcelona, Spain. “We are looking to open this up to other operators,” he said. “Banks don’t want to work with just Telefonica. Interoperability and collaboration is key.” The company is also planning a trial at Distrito C, Telefonica’s headquarters in Madrid. “These two trials will give us increased learnings,” claimed Ramsden.

Finally, Ramsden outlined the four key challenges facing this space: commercial (the need for clearly defined revenue models for all investing parties); the need for industry alliances between operators, retailers and banks; the requirement for more infrastructure (NFC handsets, SIMs etc); and ensuring a good customer experience (Ramsden noted that consumers must have consistency of experience for core services across operators).

“Collaboration is key and necessary around a suite of common standards,” added Ramsden. “Infrastructure needs to be rolled out – we need to keep pushing.”