The privately-funded two year old company - co-founded by former Gemalto executive Deepak Chain - has developed a smart card chip that can be pre-loaded with payment applications and inserted into spare memory card slots in existing mobile devices.

The company says the patent-pending In2Pay microSD system is compatible with near field communication (NFC) technology and existing merchant, mass transit and banking network infrastructures.

DeviceFidelity - which will be demonstrating In2Pay at the forthcoming Cartes show in Paris - claims to have signed 'evaluation' agreements with some of the largest card issuers in the US.

DeviceFidelity CEO Chain, says: "In2Pay's open architecture, industry standard smart card chip and compliance with industry processes make it easy for banks, payment networks and wireless carriers to deploy mobile payment programs quickly without special handsets or changes to merchant infrastructures."

He says that 60% of existing mobile phones deployed in the US have a microSD card slot and that the software is designed to operate on "most popular smart-phone operating systems".

Finextra verdict: Moving the contactless payment application from the plastic card to the mobile handset is likely to prove a killer feature with consumers. But with NFC yet to become a standard feature on most mobile phones, any applications that can offer a bridge to fully integrated contactless payments on the personal handset will stir up plenty of interest. DeviceFidelity has a neat approach but it appears to have been left in the starting blocks by a new generation of lightweight RFID sticker-based systems, which have already picked up momentum with issuers and consumers. It's going to be a long, hard sell.