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A joint venture between some of the UK's main mobile phone networks could have a negative impact on the mobile payments market as a whole, according to Google and PayPal.

As reported by the Financial Times, 'Project Oscar' - a joint venture involving Vodafone, O2 and Everything Everywhere (the parent company of Orange and T-Mobile) - will see the creation of a new platform for payments between mobile phones. The venture would also involve targeted advertising based on the personal details of people who use the system.

The main concern amongst experts is the idea of an in-built payments chip on SIM cards that would effectively be controlled by the mobile networks. Investigators are concerned that these networks could refuse to sell phones that could run alternative mobile payments systems, such as PayPal or Google's own Google Wallet.

Mobile payments technology, which allows people to transfer money between bank accounts using their mobile phone, is still at a very early stage - but there are already indications of just how popular it could become. Barclays recently launched its own 'Pingit' app, which allows customers to make payments to other users simply by dialling their mobile phone number. And a growing number of retailers are installing 'contactless' payment points, which enable people with NFC-enabled smartphones to make payments by simply 'swiping' their device.

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