Using cellphones as credit cards?
February 15, 2010 by admin
Filed under Uncategorized
No, this is not a science fiction dream. The technology that allows you pay for products just by waving your cellphone over a reader does exist. People in Japan and South Korea have been using it for the last several years to pay for everything from train tickets to groceries to candy in vending machines, simply by waving their phones over a contactless reader. It is currently undergoing small-scale trials around the world, including in Atlanta, New York and the San Francisco Bay Area and from the feedback received, nearly everyone has liked using this form of payment.
However, most consumers in the United States will not be able to wave and pay with their cellphones anytime soon, the reason being that the number of companies which must work together to give the technology to the masses have yet to agree on how to split the resulting revenue. In Japan, this was not a problem because a single carrier, NTT DoCoMo, accounted for more than half the Japanese market at the time the system was rolled out and thus had significant leverage with financial institutions and handset manufacturers.
This is not the case in the United States. For such payments to work there, various companies such as cellphone manufacturers, carriers, financial institutions and retailers must all play their roles. There also must be some sort of intermediary that is trusted by both the financial institutions and the carriers to activate the virtual credit cards inside the phone. One problem is that anyone using a credit card inside a cellphone is simultaneously a customer of the financial institution and of the carrier.
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