Oyster cards have revolutionised travel in London and laid the foundation for contactless technology in the Capital
Five hundred customers with trial '02 wallet' phones will be able to use their mobile handset to pay for travel across London.
Oyster has been a huge success since its launch in 2003 making Londoner's journeys cheaper, easier and quicker.
More than 10 million cards have been issued and just three per cent of payments on London's underground and buses are now made using cash.
The 'O2 wallet' trial will now determine how customers feel about having Oyster technology embedded in their phone.
It will also shape if, and how, it can be used on the transport network.
This will help TfL and TranSys decide whether it would be worthwhile developing the trial further to offer more passengers an alternative to the regular Oyster card.
Five hundred customers, all of whom are regular Oyster users, will begin the six month trial today.
It is the UK's first large scale pilot of 'Near Field Communications' technology on mobile phones.
This means that customers on the trial will also be able to use the phones for cashless payments, smart posters and ticketing management.
The other partner organisations involved in the trial include Barclaycard, Visa Europe, Nokia and AEG.P
Each trialist will be given a Nokia 6131 handset installed with the O2 Wallet.
They will be able to test a wide range of different services in London, such as making purchases in retail outlets and travelling on London's public transport system.
Every participant will be asked to provide feedback on the services featured in the O2 Wallet by evaluating its ease of use, security and overall usefulness.
Shashi Verma, Director of Fares and Ticketing at TfL, said: "Oyster cards have revolutionised travel in London and laid the foundation for contactless technology in the Capital.
"With more than 10 million Oyster cards issued since their launch four years ago Londoners are now used to and comfortable with this type of payment method.
"We are always keen to look at new technology that may be used to keep Oyster at the cutting edge of ticketing systems and provide customers with cheaper, easier and more convenient travel."
Sue Doyle, Marketing Director for TranSys, said: "Oyster is all about making travel easier and more convenient in London.
"It has become part of London life for millions of people who love to use Oyster because of the value and benefits the system delivers.
"This trial is a valuable opportunity for us to listen to customers and find out more about how they would like to use Oyster in the future."
Notes to editors