Mobile operators want phones to double up as purses

Orange, T-Mobile and Vodafone have got together with Spanish firm Telefonica Moviles to create a mobile payment system, known as Simpay.

They are hoping that Simpay, which will allow any user on the four networks to pay for games, music or even pay for a parking ticket via their mobile, will transform phones from communication devices to mobile purses.

Paybox, a similar idea, offered independently of the main European operators, floundered earlier this year due to lack of interest from consumers.

So called m-commerce has been touted as a possible successor to e-commerce with some wild predictions for how much business it can generate.

Other barriers

Predictions for m-commerce have become more modest and the main concern now is to make it as easy as possible for users on any network to use their phone to purchase goods or services.

"Our aim is for you to see it [the Simpay brand] on music websites, when making a flight booking or even when paying a bus fare," said Tim Jones, Chief Executive of Simpay.

Paolo Pescatore, analyst with research firm IDC, believes the system could simplify the process of paying for goods via mobile phone.

But there are other barriers to overcome.

"There is a big issue about whether users are comfortable in carrying out transactions on mobile devices," he said.

The mobile operators need to promote more mobile shopping services he said.

Initiatives such as Vodafone Live, which offers users the chance to purchase ringtones and games, could persuade customers that buying via mobile phone is as simple and safe as other purchases.

M-commerce millions?

M-commerce is likely to be driven by small transactions though.

"People wouldn't want to buy a washing machine or a computer on their mobile phone. It is more likely to be spur-of-the-moment things such as theatre or cinema tickets," said Mr Pescatore.

According to IDC there are 3.5 million m-commerce users in Europe this year generating revenue of around $1.4m.