Cash, credit card or mobile phone?

LONDON, England (CNN) -- One of the many functions of mobile phones could soon include paying for pizza or cinema tickets if some of Europe's leading banks and mobile phone makers get their way.

The likes of HSBC, Deutsche Bank, Visa, Siemens and Nokia are members of the Mobey Forum, which was set up last year to encourage the use of mobile technology in financial services.

The forum wants to see consumers eventually using mobile handsets as payment devices on a daily basis, but it recognises that the system needs to be convenient, secure and trustworthy if it is to become a reality.

"Consumers need convenience and mobility across sevice providers without affecting security," said chairman of the Mobey Forum Bo Harald.

The technology it is proposing involves phones having two chips installed in them: One Sim provided by the mobile operator, as is currently the case, and one from the bank.

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It says keeping the chips separate will provide consumers with the choice they require as they will not have to select a specific operator or bank to use the service.

Liisa Kanniainen, vice-president of mobile banking at Nordea, the Scandinavian Bank that was one of the founder members of Mobey, told CNN that convenience and cost were two of the most important issues for consumers.

"This is why both mobile phone companies and the banking industry are involved in Mobey," she said.

"The banks are already involved in e-commerce and their presence is needed to convince customers that the system is trustworthy and secure. Bringing the banking and mobile phone industries together in the forum means we will be able to benefit from the infrastructure already developed to help keep the cost of such services down for both customers and providers," she added.

A PIN number will need to be entered each time a purchase is made. Initially, purchases will only be made online on WAP or third-generation internet phones.

Kanniainen equated the system to cash machine except that the card is already in the phone, with only the PIN needed to activate the transaction.

The banks hope to provide links to shop tills once local wireless network technology becomes more commonplace. All transactions could then take place over the telephone.

Face-to-face shopping with a mobile is expected to develop more slowly than remote shopping, mainly because of the slower development of the technology needed.

"Some markets will adopt the sytem more readily than others. In Nordic coutries where you can already pay for drinks from vending machines, car washes and parking with mobile phones, you can see it being popular," said Kanniainen.

Members of the forum are due to start trials of the technology later this year, while full-scale implementation is expected to begin within the next two years.