Mobile phones to be used as Oyster and credit cards

The handsets will allow consumers to use their phone, exactly like current Oyster cards, and could be used as electronic tickets for certain events.

It is also hoped the system, which could be in place by next year, will be used to pay for entry to certain 2012 Olympic events.

Mobile firm O2 is to announce today that a first six-month trial of the system, with 500 Nokia handsets, was a major success.

O2 used it with Ticketmaster at its Dome venue, at a West End theatre and at its Wireless music festival in Hyde Park, raising hopes that it could soon become widespread at venues across the capital.

The phone firm is to set up a consortium of mobile phone makers and payment companies such as Visa and Transport for London to run the project, and it is hoped all major phone networks and makers will sign up.

"Our aim is that you simply take out your phone and nothing else," said Claire Maslen of O2.

"You will be able to pay for small and large items, and have the phone act as an electronic ticket for both concerts and major events. This technology is already available and the relevant standards agreed, so we hope that all of the major manufacturers will launch phones using it early next year," said Miss Maslen.

A total of 89 per cent of those involved in the trials said they would like to have Oyster cards on their phone, and two-thirds said they would also be interested in having credit card capabilities.

Oyster phones will require a new Sim card which will contain the radio transmitter currently found in Oyster cards and some credit cards.

As well as working as tickets and travel cards, users will be able to make credit card payments, although they will have to enter a Pin to spend more than £10.

A TfL spokesman said it was hopeful the system would be in place soon. "With more than six million cards in regular use, Oyster has blazed the trail for contactless technology in the UK," a TfL spokesman said.

"TfL remains at the forefront of contactless technology and considers NFC [near field communication] an exciting prospect for the future, providing significant benefits for our passengers."

A 2012 spokesman confirmed it was looking at the system for the Games.

Visa, a main Olympic sponsor, has pledged to make 2012 the first cashless Games and plans to install thousands of electronic readers at venues across the city.

Mary Carol Harris, of Visa Europe, said: "2012 will be an incredible showcase for this technology but I think O2's trial shows that this technology is already here."