Thursday, August 5, 2010

Hang On Mary, While I Swipe My Phone

You are sitting at a lunch counter talking with a client on your smart phone, checking your email, and tweeting about the great sandwich you've just eaten. And then, with one swipe of your phone, your lunch bill is paid.

This is the vision of three unlikely rivals, now in alliance to change the way we pay our bills. AT& T, Verizon Wireless and T-Mobile USA are exploring a joint venture to develop a mobile-payment service that uses cellphones. This, according to The Wall Street Journal dated Tuesday, August 3, 2010, in the Corporate News section.

The owner enables the phone for wireless payments by inserting a small card with a radio chip or by affixing a sticker with an electronic ID tag. The cellphone is swiped in front of a wireless reader that connects to a credit card or bank account and withdraws money for payment. Some cellphones may have the ability to display information at the end of the transaction such as account balances.

Phone companies in other countries, (Japan and South Korea, to name a couple) have been successful in rolling out payment services. However, the U.S. has had it's technology problems, as well as regulatory issues. There has also been a lack of demand by U.S. consumers. Once the challenges have been met and resolved, however, the demand by consumers may change.

Looks like smart phones may be getting just a bit smarter, but personally, I'm not ready to turn a smart phone I purchase (still using a "dumb" phone until my current contract runs out) into a credit card. I wonder just how much the cost of the "smarter" phone will go up in price for the consumer. And, of course, the most obvious concern would be in how companies will prevent fraud. Until a phone becomes smart enough to eradicate fraud and identity theft completely, I think I'll pass on this one .... at least for now.

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