Chip maker ARM is planning on turning your mobile phone into a chip and pin device in an attempt to improve payment security and do away with the credit card altogether.

The concept, which the company believes could be common place within 5 years, has all the security protocols normally found in a Chip and Pin card reader as well as those found in a credit card embedded in the phone.

Users would only have to wave their phone over a contact hotspot before being prompted to type in their pin details on their phone be it hard keys or a touch screen.

"One of the greatest concerns with the current system is that you have to trust the device you are using hasn't been compromised", an ARM spokesperson told Pocket-lint. "With this system you'll be using your own device".

The system, which is currently undergoing tests at the moment, has had plenty of interest from banks and handset manufacturers the company said.

Expect losing your phone in the future to mean that you've lost your wallet as well.