FOR the first time in Singapore, credit card holders will be able to use their mobile phones to pay for their purchases.
Although only a limited trial - 300 hand-picked Citibank MobileOne (M1) Visa cardholders will take part - it marks the first step in making this mode of payment, currently only commercially used in Japan, available here.
The trial is aimed at determining customer spending patterns, such as where consumers will use such a service, and the system will be rolled out to more people if results are promising.
Trial participants have been given cellphones embedded with a computer chip that contains their credit card details.
They can pay for purchases of up to $100 at more than 400 merchants, including cafe chain The Coffee Connoisseur, music store Gramophone and Popular Bookstore outlets islandwide, by simply tapping their phones against a wireless payment terminal - a process similar to using an ez-link card.
Unlike normal credit card transactions, no signatures are required. If a phone is lost, users can cancel an account in much the same way they would with regular plastic.
The trial will last three months, said Citibank Singapore's business director of credit payment products John Denhof, and will help the bank get a better handle on the types of products and services consumers buy using this payment method.
In Japan, the world's most sophisticated mobile payment market, millions of consumers use their mobile phones as credit cards, paying for a wide array of products and services from petrol to airline tickets.
After being used for payment, the phones even double as tickets, storing an e-receipt that can be checked at an airport, for instance.
The possibility that such services could become available here soon piqued the interest of several people contacted.
IT professional Ivan Tay, 30, who is not taking part in the trial, said the appeal of such a system is its convenience factor.
'I have so many cards...credit, debit, ez-link and discount cards, I don't even carry all of them with me.
'Storing them in a phone helps me save space, and anyway, I take my phone with me everywhere,' he said.
In February, the Government announced plans to appoint an agency to oversee mobile payment efforts.
This agency will ensure that all sensitive financial information being transmitted wirelessly is secure. It will also make sure mobile payment systems, such as the one announced yesterday, work with similar systems being rolled out in future.
It was formed after earlier attempts to set up mobile payment efforts, including a $20 million trial co-funded by the Infocomm Development Authority (IDA) in 2001, went belly-up.
A 2003 IDA report said previous initiatives failed to take off because of technological limitations.
It also blamed the inability of various stakeholders - many of whom are also business rivals - to work together to offer a comprehensive and attractive service capable of pulling in large numbers of consumers.
The IDA said mobile transactions, together with related businesses such as mobile advertising, are expected to generate an additional $60 million in revenue annually for all the parties involved in five years.
