`Bank in a phone' 18 months away

Hate queuing at cashpoints? Worried about carrying cash around? Logica, the fast-growing computer services company, thinks it has the answer. Logica is teaming up with Cellnet, the mobile phone operator, and Motorola, which makes handsets and smart card circuits, to develop a "mobile wallet".

The deal, likely to be announced in the next three weeks, is to develop a mobile phone which can send and receive cash electronically. Customers could pay cash for theatre tickets, a pizza or a holiday over the phone. They could also use the phone to transfer money between accounts, pay bills and view bank statements. Experts reckon a "bank in a telephone" is just 18 months away.

Logica, Cellnet and Motorola would make obvious partners. Cellnet's Barclaycard phone, which lets customers check their bank and credit card balances, has proved popular. Motorola is a leader in integrated circuits. Its new SIM card allows users to pay for phone calls as they make them and download cash directly from their bank accounts.

According to market research by Dataquest, although the market for smart cards is growing, customers want additional features. They want to be able to see and key into the smart card information, they want a subsidised or free display device and they want their smart card services to work everywhere.

The competition between mobile phone operators and others to offer all this will be fierce. As one analyst put it: "No one will buy a mobile phone just because it makes telephone calls. Customers want ever more sophisticated services."

Separately, today Logica will announce a contract, worth around pounds 250,000, to fit Girobank with a modern financial messaging system.