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UFJ NICOS Co. will tie up with the Visa International credit group to expand UFJ NICOS Smartplus mobile-phone payment service, officials at the two firms said Thursday.

The service, already offered by UFJ NICOS, the core credit card firm of the Mitsubishi UFJ Financial Group Inc., allows people who have mobile phones with integrated circuit chips to pay for purchases by swiping their phones across sensors, which pick up the customers’ credit card information.

Under the arrangement, UFJ NICOS will allow Visa to use its Smartplus payment service free of charge and the two companies will set up a new firm to handle the new service.

The tieup is aimed at boosting the firms’ market share. The firms said they will aim to increase the number of Smartplus members to 2 million in fiscal 2008 from the present 10,000 and boost the number of stores offering the service to 100,000 from the current 1,000. They also hope to make their service the industry standard through this expansion.

At present, three services are vying for supremacy in the mobile-phone credit-card business. Sumitomo Mitsui Card Co. and NTT DoCoMo Inc. have the iD service, and JCB Co. offers QUICPay.

East Japan Railway Co.’s Suica card also offers payment by mobile phone, but it is a debit card, not credit.

Mobile phones that can be used to charge to credit cards debuted last year and the number of users is growing, especially among young people.

However, as the three services operate on separate systems, it is inconvenient for retailers, which must install a scanner for each service it offers, industry sources said. Because of this, calls have been mounting for an industrywide standard.

With the UFJ NICOS-Visa tieup, the sources said the focus will shift to whether the three groups might form tieups, according to the sources.

Some industry watchers have said this latest deal might lead to greater market competition, as it could encourage the other two camps to become more aggressive in attracting users to their format.

UFJ NICOS has about 21.85 million members. It is expected to merge with Kyodo Credit Service Co., a credit card firm affiliated with agricultural cooperatives, in October and then with DC Card Co. in April 2007. The mergers will give the firm about 33 million users, making it second in the market after JCB.

DC Card plans to start offering the Smartplus service from August, and other firms, including OMC Card Inc., Central Finance, JACCS Co. and Acom Co., have already indicated their desire to join the fold.