'Oyster phone' trial goes live

O2 admitted frankly that the project will not ultimately work without the involvement of all the mobile-phone networks and banks. Any issues regarding manufacturer specificity would be moot once NFC technology makes it onto the SIM card.

NFC-enabled handsets are already used for transport in Japan and South Korea and, according to O2's vice president of research and development, Mike Short, the big issues that have arisen in those countries are usability and security. For example, if the handset is to be truly secure, a PIN number may be necessary for commercial transactions — but this may impede usability, which is the main driver behind the scheme.

Furthermore, with so many different players being involved in the scheme, the business model underpinning the project still needs to be thrashed out during and beyond the trial, said O2's spokesperson. Another issue to be overcome is who the customer calls if they lose their handset. At the moment, the loss of a handset would have to be reported to Transport for London (TfL), the operator and the bank.

If the trial proves successful, NFC technology is expected to make it into commercial handsets at the end of 2008, at the earliest.