Tech groups plan smart travel card

Technology and banking groups are in talks on developing a combined credit and travel card that could be installed in a mobile phone.

Under the plan, which could be introduced in London as early as August 2002, card holders would be able to buy tickets for the underground and buses, and access on-line banking from a single smart card fitted to the phone.

It could also put an end to one of the most frustrating aspects of public transport travel - the ticket queue. Card holders would be able to update their cards with travel units online from their personal computers.

The project has the backing of the Cabinet Office and is being driven by TranSys, the consortium including EDS, Cubic, ICL and WS Atkins, chosen to carry out the £1.2bn upgrade of London Transport's ticketing facilities.

Nicole Carroll, marketing director of TranSys, admitted that the consortium is in talks with Visa, Mastercard and Mondex, the cashless banking system backed by NatWest and HSBC, about developing a joint card.

She refused to say how a joint venture would be structured, but said: "We are very close to setting up one or two ventures."

Ms Carroll said TranSys was also in discussions with mobile phone operators and manufacturers, but said talks were not as advanced.

"We want to get four or five applications working together on one card," said Ms Carroll. "To get this to work we need one killer application, and we believe that transport and the travel card is it."

The developments have been spurred on by the Cabinet Office. Within a month it will issue guidelines setting a common standard for smart cards. This will further accelerate their development.

A Cabinet Office source said: "We are keen to get things moving and have been in talks with the major players. As well as transport and banking, the smart cards could hold things like medical records, and even the football season ticket."

The idea of a smart card for buying goods isn't new. In 1995, Mondex held trials of cash-free retailing in Swindon. But tests were abandoned in 1997. The Cabinet Office source said: "Mondex didn't take off because it was a single-application card. We now want smart cards to have many uses."

Visa, the umbrella organisation for banks' credit card operations, is one of the parties working with the Government.

Visa has helped to co-ordinate a programme of installing computer chips into all new credit cards issued by the banks. Ken Bignall, managing director of Visa Europe, said: "At present chips are designed to defeat credit card fraud. But they have great potential in capacity and intelligence, which could be activated. Imagine a situation where applications are dynamically downloaded from computers. At some point this will happen."

Visa has also been looking at virtual cash. In Leeds, it is trialling Visa Cash, a money card with 65,000 users. A sample of users are testing mobile banking through a joint venture between Visa, Barclaycard, Cellnet and Motorola.