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Credit card giants devise m-commerce standard

Four of the world's largest credit card companies have formed a consortium to develop secure mobile payment standards.

American Express, MasterCard, Visa and JCB hope the standards will make mobile commerce (m-commerce) become a reality within two years.

The companies aim to develop a cohesive approach to issues such as security and customer authentication, rather than waiting for "fragmented'' efforts from card issuers and mobile carriers that have marked the past two years, said Joe Chouinard, MasterCard's vice-president of new e-commerce channels.

The standards would serve as building blocks for security and card holder verification for use by banks, phone manufacturers and mobile carriers, said Simon Pugh, Visa's vice-president of infrastructure and standards.

This could then lead to the development of a system that allows consumers to use mobile phones to execute a transaction at a store, with authorisation and payment information flowing securely through the mobile phone network to wired networks operated by the four forum partners, and then on to member banks.

Some analysts viewed the formation of the Mobile Payments Forum as the latest gambit in the battle between credit card companies and mobile carriers for control of the m-commerce marketplace.

Pugh said mobile carriers will be invited to join the consortium, but declined to say whether any had signed on yet.

Avivah Litan, an analyst at the Gartner Group, said the credit card rivals are putting up a united front against mobile carriers, which want to control the mobile payment process.

"I've talked to one of the major mobile carriers in Europe, and it is very interested in developing its own payment system," Litan said, adding that a number of carriers are interested in developing their own systems for so-called micropayments of $100 (£68) or less.

Pugh and Simon agreed that it would be easier and quicker to add payment service in Europe, because European phones already use built-in smartcards to authenticate access to networks.

They emphasised that standards developed by the consortium would give carriers and banks flexibility in choosing security and authentication services, with a key goal being the need to work on existing phones.

"We're not going to require anyone to buy a new phone," Chouinard said.

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