Berlin to get mobile phone payment system in October

HANOVER, Germany, Mar 15 (Reuters) German rail operator Deutsche Bahn and public transport companies in Berlin will work with Vodafone and technology companies on a trial in which customers will use mobile phones to pay for rail and bus trips.

The trial called Touch&Travel will start in October and will cover all public transport in the Berlin region as well as trains between Berlin and Hanover, the companies said in a leaflet distributed at CeBIT, the world's biggest technology trade show.

''Your handset will become your digital ticket, and you will need only one ticket for all public transport,'' the companies said, adding they aimed to set a standard for Germany and Europe.

Selected mobile phones from Motorola will be fitted with a near-field communication (NFC) wireless chip, and by holding the phone close to a so-called ''touchpoint'' reader, travellers register when they enter and leave a bus, tram or train.

Travel details are stored on the phone's SIM card and sent to the central computer via the cellular network. Travellers will settle their bills for trips once a month.

Technology companies that are involved include semiconductor company NXP, Giesecke&Devrient and Atron. NXP, the former chip unit of Philips will provide the NFC chips.

NFC is fast becoming the de facto standard for public transport. Similar chips are already integrated in phones in Japan, but this is not yet the case for European mass transit system such as the London Underground, where NFC chips are fitted in unconnected, standalone smartcards.

Several pilots are taking place in Europe, including one in Paris, but there is no live large-scale system.

In the region around Frankfurt, transport authority RMV will start tests this summer on the basis of NFC technology with Nokia and Deutsche Telekom's T-Systems, and hopes to start rolling out a system next year.

''The main reason why there are so many pilots but not many commercial roll-outs is that the banks and the operators still have to agree on a business model,'' Alexander Rolfe, managing editor of online newsletter Mobile Payments World, told Reuters.

The two main advantages of a mobile phone payment system is that consumers do not need a separate travelcard, and secondly that the readers at stations can remain unconnected, saving significantly on infrastructure investments.

REUTERS KR DB2012