Working with Visa Europe and Cardis, RBI says its CardMobile service will be introduced in an unnamed Austrian city during the second quarter. The bank is also set to start issuing V Pay contactless cards.

CardMobile will see customers download an app and install a microSD card in their handset - initially just iPhones - to enable them to make low value contactless payments at the point-of-sale.

RBI says payment credentials are stored in the phone in the chip, which it provides and has the same security level as a bank card.

Gerald Kubu, head, card service, RBI, says: "CardMobile provides an attractive alternative to cash, as it does not require customers to manage any cash or electronic wallet balance, or to look for terminals to reload their card. At the same time, merchants will find the low costs attractive."