Banks, mobile phone operators and handset makers are uniting to create a payment system that will let people use their mobile to pay for goods and services across any network in any country.

If trials of the system prove successful it could prove a boon to e-commerce and get people doing much more with their mobile phones.

Eventually the roaming payment system could become the main way of identifying mobile users and mean almost any purchase becomes more secure.

The alliance has already won a research grant from the European Union to fund large scale trials.

Pay here

Despite the efforts of almost every European mobile phone firm, customers are proving reluctant to buy via their handsets.

Part of the reason for this is because there is little for sale apart from ring tones and icons.

The lack of a cross-border payment system that lets people on any network buy by phone is limiting the number of merchants willing to offer goods and services to mobile users, said Stefan Engel-Flechsig, head of mobile commerce industry group Radicchio.

Your mobile could help you pay anywhere

Mr Engel-Flechsig said so far operators have set up proprietary payment systems and have failed to attract customers in large numbers.

"Very clearly as long as it's a proprietary infrastructure we are not going to make a business case for it," he said.

Mr Engel-Flechsig said Radicchio is helping to break this logjam by co-ordinating work on a system called Trusted Transaction Roaming (T2R).

This system would standardise the personal information held about customers and install an infrastructure that would make it easy for phone firms to swap information about customers and their banking details.

Mr Engel-Flechsig said all the operators were convinced of the need for this common infrastructure.

Security check

He said it would also make it much easier for merchants who would only have to ensure their payment system worked with T2R rather than all the different systems run by operators now.

The T2R system was intended to provide different levels of security depending on how much people were spending, said Mr Engel-Flechsig.

Micropayments would only require people to enter a PIN number but the identity of those spending between 15 and 100 euros would be confirmed using encrypted digital certificates.

A Pin could identify you

Anyone spending more than 100 euros would involve a more rigorous security system that used different keys to lock and unlock data about them.

Early trials have established that this security system can be made to work over the mobile network.

Mr Engel-Flechsig said mobile phone firms already held much of the information they need to identify people in such a system.

All they need to do now is build the infrastructure to enable information about customers to be passed freely between networks and financial institutions to confirm payments.

The T2R system has won a research grant from the European Union to fund large scale trials in early 2003.

Eventually, said Mr Engel-Flechsig, handsets could be used to verify identities for almost any purchase rather than just those made via a mobile network.