Mobile operator Orange UK and Barclaycard have extended their relationship to introduce a contactless payment system, in the form of a credit card rather than a phone.

The Orange-branded credit card allows customers to make purchases of £10 or less by waving their card over a reader at the point of sale. Automated SMS alerts allow the user to keep track of spending, set budgets and receive reminders about payment due dates.

The technology is made possible via NFC (Near Field Communications), and follows a partnership between the two firms last year. Future services are expected to allow consumers to use their mobiles to pay for goods and services at retailers using contactless technology, by waving their handset against a reader.

Orange is not the first operator to move into the financial services space. Also last year Telefonica’s UK mobile operation, O2, teamed up with NatWest to launch a prepaid debit card, but one without NFC capabilities.

The prepaid Visa cards are designed to help people manage their spending money by doing away with overdrafts and providing real time balance updates to the mobile. The card can be used almost anywhere that accepts Visa within the UK and abroad, as well as online. The card can also be used to withdraw cash from an ATM.

Ronan Dunne, O2 UK’s chief executive, said the move fits in with the company’s strategy of the ‘mobile wallet’. “We believe that we are at the start of a journey towards the coming together of phone and wallet and we intend, through O2 Money, to be at the forefront of this trend. This launch represents an important step towards O2 becoming a leading service provider with mobile at its core.”