Oxford University researchers have developed a new technology that enables safe payments to be made through mobile phones.

The technology, designed by Professor Bill Roscoe of the Computing Laboratory and colleagues, will now be lunched into the market by Isis Innovation, the university's technology transfer company.

Prof Roscoe said: "A key requirement of new payment systems will be the ability to make payments from person to person, such as paying a builder or a friend.

"What we have is technology which enables anyone to easily create a secure connection between two devices: it can work via Bluetooth, WiFi, the internet or across ordinary telephone or SMS connections.

"The core of our technology is a new security protocol that enables strong cryptographic keys to be created with the least possible work. The key to the protocol is that it prevents anyone from doing any searching to break into the transaction."

A user of the technology checks if a 4-8 digit numeric code generated within their own phone matches with the one generated by the payee. This number is random and there is no need to maintain secrecy. This guarantees that the customer's mobile is connected to the correct store, or to the cell phone of the person they have to pay. Thereafter, the payment takes place without exchanging sensitive details like credit card numbers or PIN.

No hardware is expected to be needed for the use of the technology. The Oxford team says the payment can be made in numerous ways - by using electronic cash or credit stored on a mobile phone, via authorisation of a credit card payment, or by asking a bank to pay a person a specified sum of money.

Prof Roscoe said: "The technology is designed to put the payer in charge of the connection and let him or her have direct control over how much is paid and to whom -- very much like a cheque.

"It is clear that banks will be looking for innovative solutions to avoid the limitations of current technology and that the ability to pay using mobile phones in the same way that you do now using a cheque will need to be phased in over the next eight years. The beauty of this system is that it can be used for many different methods of payment."