Using your cell phone to buy things is old hat, but handsets are on the verge of becoming substitutes for credit cards.

It might be an overstatement to say that Visa and MasterCard are lusting after cell phone users, but the two credit card companies definitely see a wireless future for themselves. And they're not the only ones, as credit card companies, banks, carriers, handset manufacturers and online payment companies sort out their relationships.

Visa and MasterCard have been experimenting with using mobile phones as credit cards for some time. Both have conducted a number of trials in the United States and are starting to get more serious about offering the choice to general consumers.

Pam Zuercher, vice president of product innovation with Visa USA, says the company continues to test various aspects of mobile payments, but she hints it will likely be 2008 before there is widespread availability. The key, she says, is availability of handsets supporting the technology.

What Zuercher is talking about is the integration of Near Field Communication (NFC) into the handsets. Nokia, Samsung and Motorola all have plans to put NFC into handsets, which allows them to be passed near a contactless payment card reader to make credit card purchases. A Nokia 3220 was used in a trial in Atlanta last year, although the NFC chip was attached to a removable cover.

At the recent International CES, Nokia unveiled what it says is the world's first phone with integrated NFC, the Nokia 6163 NFC. The phone is being used in a current trial in New York City that includes Citigroup, MasterCard Worldwide, Nokia and Cingular Wireless.

Other significant U.S. trials include one in the San Francisco area, where Visa is testing mobile payment coupons and rewards at its headquarters; in Dallas, where 7-Eleven's MVNO Speak Out is involved along with Nokia and MasterCard; and the Atlanta trial, which brought together Chase, Cingular Wireless, Nokia, Philips, Visa USA and ViVOtech.

The Atlanta trial, at the Philips Arena, was the first large-scale trial in the United States using NFC with mobile phones. About 500 people used the special Nokia 3220 handsets to make retail purchases and download information and content from "smart" posters at the arena.

Atlanta trial participants were pleased with the outcome. Visa has done some additional research since then, including a recent survey that showed 61% of the respondents between the ages of 25 and 34 are interested in using their phones to make purchases. The survey also showed 64% of U.S. consumers are interested in getting coupons on their phones.

Visa's Zuercher says the company plans additional trials over the next year to test both mobile payments and value-added services such as coupons. Phones as a payment mechanism are especially attractive to Visa, she says, because they are connected, they have a screen and keypad and most Americans carry them most of the time.

"Outside of payment, the phone allows enhanced communications among the merchants, the consumers and the issuers," Zuercher says. She says merchants can target willing consumers with coupons based on their preferences, including location and lifestyle.

The pilot in Visa's headquarters buildings in Foster City, Calif., is looking at the use of coupons and barcodes sent to phones. The coupons are sent as a text message or a graphic image to the handset, which is then shown at checkout at the company's cafeteria and coffee cafés. The barcode graphic image can be scanned, while the text message contains a code the clerk has to enter.

Visa anticipates making mobile coupons available to consumers later in 2007, Zuercher says. Consumers could get coupons sent to them based on their location and in the future could receive coupons by waving their handset near an NFC-enabled poster. She says Visa also is looking at sending loyalty program offerings directly to phones via SMS, instead of through the mail.

Visa plans on pilot programs testing remote applications such as person-to-person money transfers via phone.

"Increasingly we're seeing consumers who want to use their mobile device for everything," Zuercher says, adding that enabling mobile payments will involve the collaboration not only of the credit card companies but also of everyone in the wireless industry, especially carriers.

Dan Schatt, a senior analyst with Celent Communications, says the United States is light years behind Japan, South Korea and Singapore in the use of mobile payments. But, he says, there is progress being made in the United States that will encourage consumers to own an NFC handset.

"When it really gets interesting is when the mobile world, e-commerce and the retail worlds start to collide," Schatt says. Once NFC is integrated in the handset, he says, it makes it easy for consumers to load money from their bank accounts onto their phones and use that instead of a credit card.

Schatt says the personalization opportunity is "game-changing because little if anything must be done by the consumer to use their mobile phone as their wallet. We've already seen the tremendous value other countries are deriving from contactless mobile commerce, and we expect this initiative to have a significant impact on the way U.S. goods and services are paid for at the point of sale in the future."

MasterCard's Dallas trial, which involves consumers, allows this kind of personalization, Schatt says, because people can easily set up the payment service on Nokia 3220 phones and use the handsets to buy anything from up to 32,000 locations that accept MasterCard's PayPass.

The MasterCard trial in New York involves using NFC to download content and the phone also can be used to pay for subway fares, among other options.

Schatt says a flurry of mobile banking services will be announced in coming weeks, such as using a phone to check account balances or transfer money to another account. These kinds of services will awaken consumers to the possibility of using their handsets for a wider range of financial services, he says.

Will consumers be willing to use their phone to make payments if they have a credit card in their wallet? Schatt thinks so. He says people keep their mobile phones handy, but might have to dig through a purse or wallet to get a credit card. That efficiency alone makes phones more attractive.