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Using mobile devices to pay for small transactions - known as micropayments - is expected to be a massive growth area during the next few years. Research group Forrester has predicted that the UK mobile payment market will be worth £2.8bn by 2005.
With the advent of wireless technologies such as Bluetooth, micropayments could also be used to buy goods from vending machines or purchase rail tickets.
Russell Norman, manager at Circus, said that, as mobile phones play an important role in the restaurant's customers' lives, the company was enthusiastic about a mobile payments system.
"When [micropayments systems provider] Paybox approached us, we did not have to think twice about integrating it into our payment infrastructure," he said. "The integration process only took a couple of hours and the costs we incur per transaction are significantly lower than those of credit card companies."
Paybox launched in the UK at the end of September and has signed up a number of online merchants, including Lycos and Eurobet. Paybox said Circus is the first of many offline partners - a number of announcements are planned for 2002.
Vodafone has announced that from January its subscribers will be able to use their handsets to pay third parties for ringtones and phone graphics. Vodafone will take a 20%-25% commission on each transaction.
How does Paybox work?
To pay using their mobile phone, a customer first has to register with mobile payment service provider Paybox.
The retailer enters the customer's mobile number into their existing payment system, which is integrated with Paybox. After a few seconds, Paybox calls the user's mobile to request a four-digit Pin code to authorise the transaction.
Once authorised, Paybox informs the retailer, then debits the user's bank account. The user and the retailer both receive a text message to confirm the payment.