Barclaycard tests mobile cash service

Barclaycard and Cellnet are to join forces to test the 'mobile phone cash machine'.

In a year-long trial beginning on 1 April, 1,000 participants will be able to download electronic cash onto a Barclaycard containing an embedded chip.

By inserting the card into a specially-designed Motorola cellphone, up to £50 can be transferred over Cellnet's mobile network. The experiment is part of the ongoing Visa Cash trial, where 60,000 Leeds citizens are using smartcards to store electronic money.

De La Rue Card Systems will supply the smartcard technology, while Logica will provide the server software.

Visa card and mobile phone users in Leeds have been using a similar BC2 system since 1997 - enabling them to check bank details, balances, statements and their last 10 transactions via a mobile phone. According to a Barclaycard spokeswoman, the trial builds on BC2 and is the first to allow the mobile transfer of ecash.

A Barclaycard spokeswoman said: "The system is designed to benefit customers making small value purchases. Instead of using small change for the car park or McDonalds, they can use the card."

A spokesman for Cellnet said there are three security features to ensure the system is not misused. The user must first enter a pin number to use the phone, the data sent over the Cellnet network is encrypted to a Visa-approved level, and another pin number limits access to personal bank details.

When asked whether the system will replace the cashpoint machine, the Barclaycard spokeswoman said: "It's got a long way to go. The trials are very small. We plan to evaluate the system in a year's time to see if the public has accepted it and whether it should go national."

Cellnet called the technology "an alternative rather than replacement" to the hole in the wall.