The mobile market is constantly exploding. Advances in mobile device technology, and high-speed data connectivity (4G, WiMAX, etc.) are taking your cell phone well beyond a simple device for making calls and texting. This also means that mobile devices are encroaching on other areas. For instance, do you need a fancy GPS device in your car when your mobile can do the same thing? Now, mobile providers want to do away with your plastic credit cards by allowing your smart phone to authorize payments.
AT&T and Verizon Wireless want to bring this technology, often called contactless payments, to the forefront. It’s not new, but it hasn’t caught on on a large scale. This is surprising because this is a technology that many consumers want. As our mobile devices take over more and more facets of our lives, it’s only natural that making payments would become one of them. The major stumbling block comes with adoption. While we as consumers seem to want the technology, we aren’t going to jump on the bandwagon until we know it will work at our favorite shops. On the other side, retailers aren’t going to spend the money to update their systems until there is a large enough base of customers to support them. Looks like a catch-22.
I’d wager that most people will leave their credit cards or wallet at home before they leave their cell phone. On the same note, many people in the black community will probably own a cell phone, but not have access to a credit or debit card at all. This is why we see things like buy-here pay-here and payday loans running rampant in our communities. Prepaid “credit” cards like the Rush Card are another symptom of this situation. Being able to used your phone for payment could be a partial solution.
Another angle here is the growing popularity of location. It’s a double-edge sword in regards to privacy, but could be an excellent way to protect your assets. Your handset would have an RFID chip embedded in it, a short-range radio signal to identify your virtual credit card. This would be combined with a PIN to authorize your purchase and could also integrate with the GPS in your phone to verify your location. Retailers could potentially send data about sales/promotions back to your phone. Imagine a scenario where you are walking around your favorite store and get alerted to nearby deals (who listens to those annoying sales announcements, anyway?). When you see something you like, buying it is as simple as laying your phone down and entering your PIN.
As Fast Company notes, Apple may play a larger part in all this than other phone manufacturers. They have already been researching this technology and have been “very aggressively patenting ideas in the contactless credit card/smart phone space–including rethinking many aspects of the traditional shopping experience.” Hopefully, they don’t end up trying to monopolize or deadlock mobile payments via the patent office.
via Bloomberg, Fast Company