O2 and Nokia to trial mobile phone Oyster

O2 has teamed up with Nokia to embed the Oyster swipe card used by London commuters into a mobile phone with a trial set to start next year.

The mobile phones will include a built-in RFID chip that allows users to pay for train tickets by swiping the handset over the Oyster card reader. The cost of the ticket would either be deducted from a top-up account linked to the phone, similar to pay-as-you-go mobile phone services, or be added to the customer's monthly phone bill.

The Oyster card scheme has already been enlarged to include credit card functionality that enables small purchases in selected shops and Barclays is also working with Nokia and O2 to enable mobile phones to be used for the same purpose by integrating the swipe card functionality into the phones.

The "m-commerce" market has been slow to pick up in Europe with consumers using mobile phones to purchase items such as ring-tones but little else. Operators in the Far East have offered more sophisticated transactions via mobile phones for years.

In the UK, mobile banking services have started to emerge with a number of high-street banks allowing customers to check bank balances and top-up mobile phone accounts on their handset. A number of previous attempts in the UK to launch m-commerce systems have fallen flat, yet with UK citizens becoming more accustomed to cash-less payment systems like "chip and pin" and combined Oyster and credit cards, the market for m-commerce may be ripe.