Forget your credit card or even your wallet. By this time next year, you may be able to shop and pay your restaurant or hotel bills by swiping your mobile phone on a terminal.

This is part of a plan by leading Indian telecommunications companies like Hutch, Airtel and Reliance Communications to initiate a global pilot project to offer mobile phones embedded with a credit card chip.

Based on radio frequency identification technology, the phone will work like a credit or debit card. It can be swiped through a 'near field' communications terminal placed in shops and establishments. Payment statements can then be sent with a common phone bill.

NTT DoCoMo has already launched a wireless credit card in Japan with considerable success with terminal technology developed by Sony and Philips.

Encouraged by this, the Cellular Operators' Association of India has approached the GSM Association � the global body of operators using global systems for mobile communications technology � for a pilot project to enable international transactions on credit cards.

Describing the project as a 'technology demonstrator', Cellular Operators' Association of India secretary general TV Ramachandran said the market might initially be small but the potential to spread the plastic card culture to the masses was huge.

He pointed out that mobile phone companies had the potential to leverage large customer networks to lower distribution costs and build critical mass in a business dominated by banks.

India has over 140 million mobile customers, but just 54 million credit and debit card holders. Industry studies have shown that more than 90 per cent of subscribers in the pre-paid mobile phone market lack a plastic card.

Under current banking regulations, the service will require operators to tie up with credit card companies. Companies like Reliance Communications already have group firms offering co-branded credit cards (through Reliance Capital) and could leverage this for its mobile credit card business.