Deal to develop mobile credit cards

Aspects Software is looking to develop SIM card security

A Scottish company has secured multi-million pound funding to develop mobile phone technology that could rival credit cards.

Edinburgh-based Aspects Software has been given £12m in venture capital to create highly secure SIM cards which allow people to conduct financial transactions on mobile phones.

The technology aims to give mobile users pre-pay credits on their phone which can then be used for debit or credit transactions on the internet.

The funding will allow the company to join the race to develop mobile phone commerce, also known as m-commerce.

The mobile phone can at last evolve to become a payment device as ubiquitous as the credit card

Neil Stewart, mobEcom chief executive

Aspects Software has set up a new subsidiary company, mobEcom, to develop the project.

Company founder and mobEcom chief executive, Neil Stewart, said there could be more than one billion new mobile phone subscribers in the next four years.

"We anticipate that more than 30% are expected to need the sort of security currently being developed by mobEcom," he said.

"The growth in m-commerce will ensure a huge demand for secure applications.

"The mobile phone can at last evolve to become a payment device as ubiquitous as the credit card."

The £12m funding package is being backed by 3I investment bank, Commerzbank AG, Scottish Equity Partners and the Helsinki-based SFT 99 Technology Fund.

Security fears

Despite the huge growth in mobile phone use in recent years, m-commerce is still in its infancy.

The main obstacle to development lies in securing the data which is transmitted during electronic transactions.

Although e-commerce on the internet is conducted over a secure landline, m-commerce transmits data through the air.

The main worry for security experts is that valuable information may literally be plucked from the air and used to commit fraud.

So far, no breaches of security have been reported on the limited number of m-commerce services that exist.

But full-scale development is unlikely to proceed until the technology exists for securing all data during transmission.