Retailer Coles has followed up Monday's announcement that it has formed a financial services joint venture with GE Capital with news yesterday that it has launched a mobile wallet.Customers with a Coles rewards MasterCard or a Coles No Annual Fee MasterCard will be able to make contactless payments using an iPhone or Android smartphone.The wallet uses Pay Tag technology, which involves putting a sticker on the back of the phone. The sticker has an antenna that connects the payment device to the point of sale terminal.Stickers are a way of getting around a problem created by Apple, which has not incorporated near field communication technology into its smartphones.The sticker has a barcode allowing customers to accumulate flybuys reward points.Coles said in a media release that 77 per cent of customers who used the technology during a trial found it more convenient than traditional payments cards.The mobile wallet app is free, with no regular fees. As well as managing payments the app allows customers to track their flybuys balances.Coles will sweeten the deal with a range of exclusive flybuys offers for mobile wallet users.Coles said there were 320,000 contactless terminals in service in Australia now.