By next year, the Government will appoint an agency to oversee the rollout of a nation-wide contactless payment system, including making sure that the system works across all telcos, financial institutions and retailers.

It will also consider subsidising retailers that need help with the cost of necessary infrastructure like contactless payment terminals or doors, to ensure the effort succeeds.

This is not the first time the Government has tried to promote the use of mobile phones as a payment system.

Previous efforts, going back almost 10 years ago, stalled due to technology limitations as well as the inability of the stakeholders - many of whom are also business rivals - to work together to offer a comprehensive and attractive service for consumers.

An earlier mobile payment system tested out here, for instance, required users to key in 16-digit credit card number and then send it as a text message to pay for movie tickets or parking. It drew only a handful of merchants.

To overcome these problems, technology sector regulator Infocomm Development Authority of Singapore brought together 11 stakeholders including mobile operators, banks, credit card companies and other government agencies like the Monetary Authority of Singapore last year.

These parties have all 'agreed to collaborate towards achieving an interoperable commercial deployment' of contactless mobile payment, said IDA in a statement on Wednesday.

By next year the IDA will appoint a third party that is acceptable to the various stakeholders, and it hopes that consumers will be able to start paying with their mobile phones within the same year.