O2, the brand telecommunications giant Telefonica operates under in the U.K., will be entering the mobile POS market. The company is partnering with Visa Europe and Global Payments to offer retailers a solution that lets them accept credit and debit card payments through mobile devices.

O2 said it will offer a chip-and-PIN reader and app that uses Bluetooth to connect to smartphones and tablets. The cost is £150 ($239) upfront or £15 ($24) per month for 12 months. Transaction fees are 2.95 percent for credit card purchases or £0.75 ($1.20). The mobile POS is available for Android and BlackBerry devices with an iOS version coming soon.

"MPOS is the latest addition to our portfolio of financial products and services which includes mobile insurance, tablet insurance and more recently, O2 Wallet, an innovative new service designed to digitize your physical wallet onto your mobile," said James le Brocq, managing director of O2 Money.

Le Broc said that O2 understands the importance of the mobile device in digital payments. "Our new mPOS service has the ability to transform the revenues of smaller businesses and sole traders by offering their customers the ability to pay with Visa or MasterCard credit or debit cards as an alternative to cash."

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