Xu Yiming seldom carries cash, but he even pays for bus, ferry and movie tickets, as well as all goods he buys at retail shops, without credit cards. Rather than bother with these traditional forms of payment, he simply waves his mobile phone to complete most transactions.

Xu, who works for an insurance company in Xiamen, East China's Fujian Province, is a volunteer in a pilot project for a wireless short-range technology designed to facilitate cashless payments through mobile phones.

China Mobile, Nokia, Philips and local Xiamen company E-Tong Card jointly launched the field trial last month in the coastal city. More than 100 volunteers use Nokia 3220 handsets to make mobile payments through any sales point covered by the Xiamen E-Tong Card, including on public buses, ferries, restaurants and movie theatres throughout town.

The phones are equipped with a chip developed by Philips for near field communications (NFC). By waving their NFC-enabled phones close to a payment terminal provided by E-Tong, mobile phone users like Xu can pay for a wide range of items.

Financial data, or a "mobile wallet", is stored in the phone.

The trial bodes well for all of the companies involved, as smart cards are popular in Xiamen. E-Tong Card had already issued 850,000 smart cards for electronics ticketing applications by April, according to company deputy general manager Yao Dongdong.

An average of about 600,000 transactions are completed each day. The NFC trial, if successful, could even increase the popularity of smart cards, says Yao.  "The prospects for NFC cards are really rosy."

Chinese consumers tend to rely more on mobile phones in their daily lives than people in other countries. A global survey on behalf of Nokia showed that for 40 per cent of Chinese mobile phone users, losing a handset depressed them more than the loss of a watch, credit card or even a marriage ring. Globally, this figure stands at 21 per cent.

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