The emergence of a patent filing has stoked speculation that Google is working on a mobile phone-based payments service dubbed “Gpay” that could be rolled out by the internet search giant with a new phone handset.

Speculation hit fever pitch last week over the possible shape of Google’s next foray into telecoms as a host of blogs carried pictures of what was claimed to be a low-cost, internet enabled handset – the “Gphone”.

The fresh patent, which was filed last year by Google but has only just been published, describes how a text message from a mobile phone could trigger a “computer-implemented method of effectuating an electronic on-line payment”.

While mobile phone-based payments systems already exist, leading some onlookers to snipe that “Google is trying to reinvent the wheel, other commentators suggested the development of such a service could give Google a lift as it makes a major move into telecoms.

Google already runs an online payments system, called Checkout, which competes with EBay's PayPal.

The SEOptimise blog, the first to report on the new patent, said: “A payment system would be a logical extra item to make the Google Phone stand out amongst its competitors. Certainly Google would like to have at least one ‘killer application’ before it tried to break the mobile market and a payment system would seem a good solution.”

The Intomobile site said: “Pay the milkman with your mobile phone … tip the neighbourhood paperboy with an SMS text message - the possibilities are exciting, to say the least.”

A Google spokesman said: "We file patent applications on a variety of ideas that our employees come up with. Some of those ideas later mature into real products or services, some don't."

The Gpay patent filing describes a system where a user sends a text message to Google that gives details of a payment to a specified payee. GPay would debit the user’s bank account and credit the payee. It suggests that a user would not have to keep an account with Gpay as payments would be made externally.

The filing added to the feverish speculation that Google is set to make a move into mobile phone hardware. Last week, reports suggested that Google is set to launch an internet-enabled phone – or range of phones – that would retail for as little as $100 (£50) when it makes its debut in US.

Blogs claimed that the phone would be fitted with a proprietary operating system to rival the Symbian platform used by manufacturers including Nokia, the largest mobile maker, and Microsoft’s mobile version of Windows.

CrunchGear, a sister of the Techcrunch site that broke the news of Google’s $1.65 billion acquisition of YouTube last year, said that Google is “currently assessing over 20” phone models from HTC, the Taiwanese manufacturer that has consistently figured in speculation over a possible move into hardware by Google.

It added that the Gphone would come fitted with Google Talk, the company’s voice over internet protocol system, which allows users to make free or cheap calls over the web.

A Google spokesman said the company would not comment “on rumour and speculation”.

However, Google is said to have shown a prototype to US mobile operators, including AT&T, T-Mobile and Verizon Wireless.

The three largest players in internet services – Google, Yahoo! and Microsoft – are all focused on mobile as a key source of future revenues.

The mobile advertising market is estimated to hit $11 billion (£5.4 billion) by 2011.

Google has already brokered deals with mobile phone companies, including Vodafone, the British operator. Google’s search engine also comes preloaded on handsets made by companies including Samsung and LG.

Yahoo!, which believes that more consumers will eventually access the web through mobile handsets than through computers, this week launched a revamped version of its e-mail service that allows users in the US to send text messages from computers to mobile phones.

Google also recently expressed interest in placing a $4.6 billion bid for a licence for part of the US airwaves, an asset that could be used to roll out a wireless broadband internet network.

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