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Last Updated: Tuesday, 1 March, 2005, 00:12 GMT
Mobile wallets start to take shape
By Joia Shillingford
BBC News business reporter

Simpay prototype
Buying a Black Eyed Peas ringtone could get easier
One day you will be able to leave your wallet at home. New ways of paying for goods using mobiles are starting to emerge.

Simpay, a new payment scheme for mobile phone content, has gained the support of Vodafone, T-Mobile, Orange, Telefonica, Proximus and Amena.

Any of the 70m customers of these six operators in Europe will be able to add items under 10 euros (6.91; $13.24) to their mobile phone bill by the end of this year.

Spanish trials have already taken place and customers of Vodafone, Telefonica and Amena will be the first to get access to the Simpay service this summer.

"We are fully committed to this scheme for the long term," Guy Laurence, global terminals and consumer marketing director of Vodafone, the UK-based mobile operator, said at a mobile payment roundtable held during the 3GSM World Congress in Cannes.

Shopping around

Sarah Taylor, a spokeswoman for Orange, the France Telecom-owned operator which is a founding member of the scheme, said: "Any merchant wanting to offer services to mobile users will only have to sign up with one Simpay member in one country.

"Then any of the customers of the six operators will be able to buy from that merchant and add the cost to their mobile bill."

Stars Wars
Orange customers have been avid buyers of Star Wars images

She believes this will be much more convenient than providing credit-card details, or sending a premium-rate text message, a payment method available for some services today.

But even with today's limited mobile payment methods, mobile users still buy ringtones, wallpaper and games with their mobiles.

According to AT&Kearney and the Judge Institute of Management Studies: "Mobile payments are growing in acceptance among wireless users, with more than a quarter saying they are confident making payments on their mobile phone."

Mobile content: Top 3
Images and TV voting

They found 34% of people are willing to have the charge appear on their phone bill.

Orange's Ms Taylor says: "The next step for Simpay is to use it to purchase items other than mobile content. We have started discussions about that."

Around the world

Although Spain will be the first country to offer Simpay, it will be introduced in the UK and Belgium in the fourth quarter of this year.

Simpay estimates that its scheme will see the mobile industry generate 1bn euros of extra transactions by 2007.

But mobile payment in Japan is already more advanced and provides a glimpse of how things could develop in the West in future.

Fujitsu's 3Dx3D mobile promises to run your life, enabling comics, cups of coffee, and even the week's supermarket shopping to be purchased with a handset.

Demonstration of smartcard embedded mobile in Japan
Lost train tickets are set to be a thing of the past

It has a built-in Edy chip that can be charged with up to 50,000 yen (250) of cash.

The phone just needs to be waved over a special electronic panel to pay for goods. But to deter theft, it is only activated once its owner's fingerprint is recognised.

There is also a scheme afoot to give Japanese commuters the ability to pay for their train tickets using a mobile.

East Japan Railway Company commuters currently use a Suica contactless smartcard with a built-in Sony FeliCa chip to pass through ticket barriers.

But in March, the rail company and NTT DoCoMo will test a mobile-phone version of the Suica payment system, again using Sony's FeliCa chip.

The companies involved in the project, hope to attract a million mobile customers next year who will be able to use their mobiles not just for train journeys but also for purchases at some restaurants, convenience stores and shops.

Micro payments

In South Korea, SK Telecom's Moneta service, which combines mobile payment with some other banking services, has about a million customers.

In the future, finance and wireless telecoms will be integrated
Shin-Bae Kim, SK Telecom

"In the future, finance and wireless telecoms will be integrated," says the firm's chief executive Shin-Bae Kim.

Mobile payment is also finding favour in the Philippines. A service letting people transfer money via mobile text message (SMS) has attracted 200,000 users and won an award at the GSM Association Awards 2005 in Cannes.

The service, G-Cash from Philippines-listed Globe Telecom, enables residents to send money from mobile to mobile, buy goods and services and pay for business permits. They will also be able to use it to pay off micro loans through a tie up with the Rural Bankers Association of the Philippines.

In the US, a service called MobileLime, offered by Massachusetts-based company Vayusa, enables people who've lost their wallets - or spent all their cash - to pay for their taxi journey home using just their mobile. The same service can also be used to buy flowers.

Critical mass

Innovations in mobile payment could also benefit people developing content for internet websites.

Monopoly board with latest mobile counter
Mobiles could challenge cash if the latest systems take off

It will be possible to use Europe's Simpay service to charge small internet purchases to a phone.

Simpay, in fact, is claiming to be the first service that has "critical mass".

Mobile payment seems likely to take off as a convenient way of paying for small items without going to a cash machine.

But there could be risks in using them for larger items. Already people have been killed for their mobile handsets and if they contained stored credit, this might become more common.

Fingerprint identification on phones may also not be much of a protection. Presumably it means the thief would have to kidnap the owner as well as the phone in order to spend the money on it.

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