Etisalat has teamed up with MasterCard to offer PayPass, an in-phone pre-paid debit card, on handsets. 

This is based on near-field communication (NFC) technology and will enable customers to use their mobile phone to make payments for goods and services costing $50 or less, pending approval from the UAE banking and telecoms regulators. Etisalat predicts it will launch the service before year-end.

“Hopefully, by adding services, especially financial services, this is an application that our subscribers will appreciate and stay with us,” Enrique Beza, Etisalat senior manager for M-commerce, said.

Rival carrier du now claims a 44 percent share of the UAE’s mobile subscribers, having launched services in 2007, and both operators are pushing smart phones to boost data revenues and offset flagging voice margins. 

Etisalat is promoting PayPass on Research in Motion’s BlackBerry Bold 9900 device, although it will also become available on other smart phones. 

The operator plans to extend PayPass so that subscribers can link it to their bank account or credit card, but this will not be available until at least 2012.