Scandinavian partners beamtrust, a subsidiary of banking technology group SDC Development, AU-Systems, part of the Swedish Teleca group, and Danish IT security provider Cryptomathic have developed the new secure payment mechanism which utilises infra-red technology to turn consumer handhelds into mobile wallets. Consumers will be able to use the technology to pay for goods in a supermarket with their mobile phone, and, in the future, to withdraw cash from an ATM, say the partners.

The companies are planning to test the service in pilot trials in April 2002, in cooperation with Dreisler Storkøb, Sonofon and an unnamed large Danish financial institution.

The system involves a new payment terminal which must be linked to a store's existing network and placed near the cash registers. The customer pays by pointing the infrared beam of their mobile phone - fitted with a special payment SIM card - at the payment terminal and entering their digital signature. When the payment has been accepted, the customer receives an electronic receipt on their mobile phone and the transaction is complete. If the customer has more than one account, they can choose from which account the money should be withdrawn.

The transaction can subsequently or simultaneously be cleared with the financial institutions' data centres. All transactions are collected on a server in the store. All electronic receipts are collected and stored in a database that the customer accesses over the Internet. Here the customer can find information on all their mobile purchases - item, number, price, place and date.

The payment terminal is flexible and may be reconfigured for use with PDAs, other payment instruments such as payment cards, and verification options, including fingerprints.