O2 has launched its long delayed mobile wallet, allowing mobile and tablet users to use virtual payments to purchase goods and services.

Telefonica UK's O2 mobile network has struck the first blow in the mobile payment war, launching its O2 Wallet, a virtual wallet that exists on mobile phones to pay for goods and services not just online, but in real world physical retailers.

This means customers can use their mobile phones to buy the newspaper, buy train tickets or loan money to friends - all without having to open their leather and thumb paper copies of the Queen's head.

The O2 Wallet means that customers can now transfer money to other mobiles, up to £500 - these 'Money Messages' will allow consumers to lend, borrow or repay money to friends and family.