The pilot, to begin in May, will see up to 300 Citi M1 Platinum Visa cardholders given a Nokia 6212 classic handset. Participants can make purchases of up to S$100 at over 750 merchants by waving the NFC-enabled mobile phones over a contactless reader at the point of sale.

Participating merchants include cafes and restaurants such as The Coffee Connoisseur and Ichiban Boshi, book store Popular and Harris and retailer Gramophone.

The partners say they will gather feedback from users throughout the pilot assess trends in user behaviour and experiences.

John Denhof, business director of credit payment products, Citibank Singapore, says: "We believe there are many opportunities for mobile payment services in Singapore, which has one of the highest mobile phone penetration rates in the world. However, we recognize the challenges of commercialisation and scalability in the current environment. Thus, with this pilot, we aim to gain greater insight into what drives mobile payment usage and get feedback on the customer experience."

Once the pilot is completed, the companies say they will look at opportunities to further develop mobile payment technology in line with the latest Infocomm Development Authority of Singapore's (IDA) plans for NFC services.

In February, authorities in Singapore outlined plans to work with banks, telcos and payment processors to set up an interoperable infrastructure for contactless mobile transit and payments.