Vodafone to test mobile-phone payments system in Germany

Mar 16, 2007, 14:31 GMT

Hanover, Germany - Worldwide wireless company Vodafone said Friday it would make a fresh foray into the micro-banking business, testing a mobile payments system in partnership with German railways company Deutsche Bahn.

Instead of buying tickets, passengers will simply press a button on their mobile phones as they hold it near a 'touch-point' when they board and disembark from a train. They will then receive a monthly bill for the total of their travel.

The pilot project, code-named Touch & Travel, would be operated from October on an inter-city line between the German capital Berlin and Hanover and on pubic transport in the suburbs of Berlin.

Speaking at the Cebit computing expo in Hanover, Germany, British- based Vodafone and Bahn said they hoped to develop a system that would be saleable to other companies within the next year. Bahn planned to introduce the system nationally after the pilot phase.

To participate, phones must be equipped with near field communication (NFC) modules, which are fitted in many handsets.

Big international phone groups have in the past tested schemes to use phones as devices to make small payments. Such systems would have made phone companies competitors to the credit-card industry, with customers settling their bills monthly with the phone company.

Previous mobile-phone projects were abandoned after phone companies grew concerned at the high risks and lack of profits.