Initially, the service will enable customers to top-up their phone credit from their bank account via SMS text messages. The service will be extended to include other purchases in the future.

The payments system was developed by New Zealand firm M-Com and requires an alphanumeric password for authentication of the user's identity. Purchases will be charged to a customer's bank account rather than being charged to a mobile phone account.

Clayton Wakefield, group general manager, technology and operations, ASB Bank, says: "The technology developed for mPayment provides the platform for any number of merchants to offer their customers a new way to pay for goods and services using their mobile phone."

"We will be actively seeking new partners to join this initiative and ultimately we expect this technology to be available to all banks and telecommunications companies in New Zealand," he adds.

ASB Bank and Telecom's advanced solutions group completed technical trials over the Christmas period, and plan to launch the prepaid top-up service to customers in late March 2004.