Mobile phones are becoming increasingly multi-functional devices, sparing the need for other gadgets.

Starting next year, in Bulgaria at least, they can replace your debit card and the cash in your pocket, as well as spare the need for extra trips to the bank or internet banking.

The pilot project for the mobile payments system in Bulgaira started in early October. Its goal is to gather reviews and recommendations on potential improvements before the service is launched commercially.

"Right now, we cannot say when the service will become available, since we first have to see the results of the pilot project. It is probably going to happen next year," Atanas Sharkov, the chief operating officer of SEP, the company behind the service, said.

What can it do?
The main innovation is that the mobile phone will replace your wallet, hence the name of the service – "mobile wallet" – which will give customers the ability to directly manage their bank accounts through the phone menu. To activate the service, customers will have to visit their mobile provider.

"All operators have the opportunity to join, we are just providing the service, but they will have to decide when and whether to offer it to their customers," Sharkov said.

The telecommunications company would provide customers with a new SIM card, with the software application pre-installed.

"This will happen free of charge and on the spot, without any change to your phone number," Sharkov said. "For now, the service is only offered by Globul, but the [other operators] have said they were ready to join in the future".

SEP’s service does not require a top-of-the-line phone, as any old one will do.

The next step is a visit to the bank and linking the application to an existing bank account or creating a new one. So far, Postbank and Allianz Bank Bulgaria are the only lenders working with SEP, but negotiations with other financial institutions are ongoing. After the service is launched commercially, customers will be able to use it only if they have accounts with the partner banks.

Banks will offer two different products, "electronic wallet" and "mobile banking", which would require filling in a registration form, including personal data, account numbers and usage limitations. Registration would be confirmed by dialling a confirmation code issued by the bank. The SIM card will come with its own free e-signature to confirm a user’s identity.

"This is an additional level of security for this kind of banking because while telecommunication services are free, banking is not. With such a card and its e-signature, the bank can identify its customer. The important part is that the key is only in the card’s chip and cannot be replicated on another carrier, unlike with internet banking and memory sticks, for example," Sharkov said.

After registration, the bank will ask for a four-digit security PIN. However, this is not a bank-generated number, so no one other than the customer would know the number, SEP said.

The registration process for your e-wallet and mobile banking services are envisioned to be identical.