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Users of most popular credit cards - including MasterCard Japan - would be able to use their phones to pay for goods at any retail outlet that is fitted with a QUICPay scanner. The payment would then appear on the regular credit card bill at the end of the month.

The mobile transaction alliance hopes that these electronic wallets will eventually replace cash, credit cards, identification cards and electronic plane or train tickets with a single device.

This is not the first foray by the Japanese into using the phone as an e-wallet. In 2004, the giant Japanese telco DoCoMo launched its smart cards for phones that could be used for a variety of functions such as keys, train passes, a debit or credit card and personal ID card. DoCoMo says it has sold some five million of the phones and now the credit card companies want to break the telco's monopoly with their rival standard. The mobile transaction alliance has 39 member companies so far and is looking to sign up more in the near future.