Mobile operator O2 has launched a mobile payments service that will allow consumers to pay for goods and services online, and transfer up to £500 daily to any UK mobile phone number using an iPad or smartphone.

The application will rival Google Wallet, PayPal and Barclays PingIt, which all offer mobile payment services.

O2 said that its new service, dubbed O2 Wallet, can link to consumers' existing Visa and MasterCard credit or debit cards to upload funds, and can also allow users to pay for shopping in a physical retail environment at more than 100 online retailers by using a barcode and search engine function.

Eden Zoller, principal analyst at research firm Ovum, believes that the service is the most comprehensive of its kind to be launched by a European mobile operator.