Tested: phone that replaces your wallet

The only problem, as the Evening Standard discovered during tests, is finding shops where the device can be used. So far, only a handful have installed readers for the new O2 Wallet handset.

We were able to use the Tube, ride on buses, and buy doughnuts and sushi - all with a swipe. As well as working as an ordinary mobile, the Nokia handset also acts as an Oyster card and a credit card.

O2 has given one each to 500 commuters in a trial before the device goes on sale, probably in May. The device also gives customers access to a members' bar at the O2 Arena.

To buy goods worth up to £10, the phone is simply swiped over a reader by the till. For purchases of more than £10 a Pin must be entered. Purchases appear on your credit card statement as normal.

Despite being told the phone could be used in Threshers and Books Etc, mention of it in the branches at Victoria station was met by blank stares. In the station only YO! Sushi and the Krispy Kreme stall had the swiper.

Ronaldo Daza, assistant manager of the YO! Sushi branch, said: "The machine has been installed for about three months. People have used the Barclaycard Oyster on it but this is the first time I have seen someone use a phone. It's an amazing idea. It makes the transactions much quicker. I think it'll take off."

On the streets of London there were mixed reactions. Zoltan Farkas, 27, from Essex, said: "I like it but there are only a limited number of shops you can use it in. I don't often buy sushi, doughnuts or books."

Kate Alexander, 30, from Brighton, said: "It's great but how often do people lose their phone? It's just another thing for people to steal. At least when you have a credit card it's in your wallet in your handbag. I won't be getting one." However, should the handset be stolen, all its functions can be disabled immediately with a single phone call.

Cath Keers of O2 UK said: "We believe this technology is going to fundamentally change the way people use their mobile phones."