One bank and one telco in New Zealand claim to be taking a step forward in cultivating a genuine mobile payments mechanism.ASB Bank and Telecom New Zealand say they will offer a mobile payment service from April 2004. The service works on CDMA phones (which seem to be more common in New Zealand than in Australia), and thus are not dependent on a phone customer's SIM card (which are not used in CDMA phones).Pre-paid mobile phone recharge will be the only payment option initially. Telecom pre-paid mobile phone customers will be able to top up their phone account by debiting their ASB Bank via an SMS text message. Hugh McKellar, mobile and commerce solutions business manager at Telecom Advanced Solutions said yesterday that the solution "is definitely a New Zealand solution, a point solution between ourselves, Telecom [New Zealand] and ASB. There are only two participants, a single bank and a single telco."There's been a lot of talk around [mobile payment] solutions and not a lot of progress. So we felt the best thing to do was to stand something up, prove the model and show the benefits, and rally the others to the standards."It's definitely not dependent on the SIM card in the phone. CDMA phones do not have SIM cards."There is a registration process. The customer has to link their debit account at ASB Bank, and their Telecom prepaid mobile account. They are able to top using an SMS message from the phone by putting in an authentication code. It's not your bank PIN, and its not your online banking password. It is something that it deliberately separate."It creates an m-commerce transaction. It's not an Eftpos transaction. And what that does is it debits NZ$20 or whatever from your bank account and credits the Telecom bank account. "So it's an SMS based service, using pre registration and authentication. Because it uses those technologies it is handset independent and carrier independent."How does this go further? For anyone that has a pre-paid style of business, this would work in exactly the same way."McKellar suggests merchants that make use of card not present transactions, or users of prepaid services such betting agencies, pre-paid electricity and home delivery services are all candidates to make use of this style of payments."The response has been overwhelmingly positive, generated a lot of industry discussion. I think from a banking perspective, the other banks, we've been very clear that we see this as piece of industry infrastructure."Part of the relevance of this initiative is the effort, reported here in December, by mobile phone operators in Australia to develop a proposal to take to local banks to facilitate mobile phone recharge. The request for information from the mobile phone operators talked about a "mobile phone recharge switch" that would somehow link into the Eftpos network. The operators are still looking at the responses the request for information.