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A Budapest technology company is promoting the widely available Bluetooth format, instead of near field communication technology, for mobile payments.

Near field communication, which many financial companies are testing, is derived from the technology already used in contactless payment cards, and installing it on phones would make them compatible with contactless card readers. However, few phones currently include NFC components.

Rollcomm Worldwide Corp. says it has developed a payment system that uses the Bluetooth wireless communication format, which is installed in almost every handset. The system lets people make purchases at the point of sale, and it can support a wide range of functions, including payments, loyalty tracking, and account inquiries, Robert Szabo, a co-founder of Rollcomm, said in an interview Wednesday.

The debate over formatting underscores the larger question of how the revenue model for mobile payments should be structured. Financial institutions, mobile carriers, and payment networks have yet to agree on a model that would let each share in the expected income streams.

Mr. Szabo said using technology already built into phones can remove carriers from the equation and simplify the business model.

"The bank could own the system," he said.

Carriers are in no rush to deliver NFC-capable phones to the market without assurances that they would get a piece of the action from mobile payments, Mr. Szabo said. Using Bluetooth would eliminate that leverage, he said, since it would not require the operators to distribute a new generation of handsets.

Payment executives question whether a Bluetooth-based mobile payment system could work without the cooperation of the mobile operators.

"My sense is that mobile operators will need and want to cooperate with Bluetooth payment systems. We'll see how this plays out," said Jeff Semenchuk, an executive vice president and the head of growth ventures at Citigroup Inc.

Citi expects carriers to have a role in mobile payments, no matter which communications platform is used, Mr. Semenchuk said.

"No one will make money until we all decide to make money together," he said. "We can't do it alone."

Citi is planning a large test of NFC mobile payments in India, but it also is investigating Bluetooth options, which have only recently become available, he said. "It's too soon to make the call" on which technology will prevail or whether they will coexist.

Simon Pugh, the head of MasterCard Inc.'s worldwide global center of mobile excellence, said his company has spent years preparing its network to support NFC, which it thinks is the most viable option for mobile payments.

MasterCard evaluated Bluetooth, but concluded that it would be too cumbersome for use at the point of sale, Mr. Pugh said. Systems using Bluetooth must search for Bluetooth-equipped devices — for example, a phone would have to search for merchant terminals — and users must select the device with which they want their phone to communicate.

Contactless cards, which use radio frequency identification, and NFC-capable phones can be waved near a reader to make a payment, and that setup is much easier than using Bluetooth, he said. "It provides the simplest, most intuitive experience."

Pam Zuercher, the head of product innovation at Visa Inc., also expressed support for NFC over Bluetooth.

"We believe NFC is a superior technology based on its short read range, ability to transport encrypted information, and positive user experience — consumers simply wave the phone in front of a contactless reader to pay," she wrote in an e-mail.

Another important difference is range. NFC devices have a range of a few inches, but Bluetooth messages can travel about 10 meters.

Under the Rollcomm system, a single reader could be installed on a retailer's ceiling to handle payments for several point of sale stations.

Mr. Pugh said that approach could raise questions in consumers' minds about the security of transactions. "How do you know which person's device is actually connecting?"

He also questioned whether mobile operators truly could be cut out of the loop under a Bluetooth model. The operators are likely candidates to handle certain essential customer services, such as removing payment credentials when phones are lost or changed, he said.

Mr. Szabo said that Rollcomm, which is funded only by its two founders, is planning to test its system with 100 shops in the first half of this year, and that more than 30 banks in Europe and Asia are eager to use the system, though none want to be the first.

George Peabody, the director of the emerging technologies advisory practice at Mercator Advisory Group, said Bluetooth could give retailers more control over the types of payments accepted at the point of sale.

Retailers using Rollcomm's system could encourage customers to initiate automated clearing house debits to their bank accounts, instead of using more costly credit cards, he said; this would enable stores to offer the convenience of contactless payments without the fees of accepting cards.

Mr. Semenchuk of Citi said that no matter which format is used, banks will still have the biggest role in the payment system.

"At the end of the day, it's people's money," he said.

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