New York City Cingular Wireless cardholders will be testing a new service that allows them to make purchases with their cell phones. Cingular announced yesterday that they are joining forces with Nokia, Citigroup and MasterCard Worldwide to try new cell phones that have MasterCard PayPass contactless payment capability. The trial will last 3-6 months and will allow the companies to determine if the "tap and go" payments using cell phones will be fast and convenience to consumers. Several Citi MasterCard cardholders with Cingular Wireless accounts have been chosen to participate in the trial. The participants will receive a Nokia handset with "near-field communication" (NFC) technology and the MasterCard PayPass payment function built in. Using the phone, trial participants will be able to make purchases wherever MasterCard's PayPass is accepted by simply holding their phone near the card reader.

The payment is then deducted from the cell phone subscriber's account. MasterCard PayPass service is already being tested in New York City subway stations using plastic cards issued by Citibank. The cards can also be used at 1,000 Coca-Cola vending machines in Philadelphia. Other merchants such as McDonald's and AMC movie theaters also accept the card, and in turn will accept the PayPass phones. Contactless payment cards distributed through banks have been gaining popularity over the past several months. As of September, more than 30,000 U.S. merchant locations had hardware in place to read and authorize contactless payments. And more than 13 million consumers already have the payment devices, according to research and consulting firm Celent. The next logical step is for the PayPass technology to be included in mobile phones, according to Cingular executives.