Many young people think their phone is more essential than their wallet (so do we). Maybe that’s because they are replacing them altogether. In certain parts of Asia, you can pay for taxi cabs, take public transportation, and make purchases at convenience stores with a wave of your mobile phone. Now mobile banking is finally making strides Stateside.
The use of integrated NFC (near-field communication) chips in phones—the same that are in those contactless credit/debit cards like Chase Blink—make carrying a wallet obsolete. A new analysis of NFC mobile payments from Juniper forecasts that its value will exceed $75 billion globally by 2013, when 20% of all phones shipped will possess NFC capability. According to Mobile Marketer, a host of large brands, including banks, carriers, handset manufacturers, retailers and fast food chains, have partnered to make contactless payments via mobile phones a reality in the United States, most likely by the second half of 2009.
“By Christmastime 2009 you’ll be able to buy an NFC-enabled handset with mobile wallet software already installed and go to any of those stores with contactless readers to make a payment by tapping or waving your phone,” said Mohammad Khan, founder/president of Vivotech, Santa Clara, CA.
RFID contactless readers are becoming more and more pervasive, and you may have tapped them with your bank card in drug stores, fast food chains, gas stations, even taxi cabs. The new step is the software in the phone, which can then use the same reader.
Nokia will have 15 different handsets equipped with NFC chips by the end of the year, with Samsung, Kyocera and Motorola all releasing versions in the near future., AT&T, Sprint and Cellular South are all running pilot programs using the technology.
A concern arises in regards to such an advancement, imagine when losing your cell phone means the next person who finds it possibly has access to your bank accounts. But these services not only make the line move faster, but can be more secure as well. Says Khan,
“Nobody can replicate the data or counterfeit a contactless card, because it’s all based on the highly secured contactless computer chip embedded in the card, which has a secret key algorithm that changes the three-digit CVV/CVC code for each purchase.”
But in terms of authentication technology, Asia has its finger on the pulse—literally. In partnership with AuthenTec, Japan’s NTT DoCoMo, has developed the FOMA F1100 phone, which has an integrated fingerprint sensor that protects not only the capability to make mobile payments, but any access to the phone’s stored information.
Mobile wallets not only make lines move faster for consumers, they can reduce the bottom line for them as well. We’re talking hyper-targeted promotional offers that would be very easy to implement. Case in point: My habit of use would produce very specific buying patterns (ex. I go to Think Coffee on Bowery and Bleeker everyday at 8am) which help marketers deliver deals that would appeal to me (automatically deducting $1 off my medium soy cappucino when I pay with my phone). Like those punch cards you used to carry in your wallet and never be able to find when you needed to pay so you accumulated dozens of them and never got jack for free. Those will soon be a thing of the past–along with your billfold.
