Future of Mobile Payment and Mobile Phone Near-Field Communication

A survey by Forrester Research found that 15 percent of Japanese mobile phone users make payments and purchase products in stores with their phones, reports CNN. Only 3 percent of people in North America are expected to conduct mobile payments in 2012.

Analysts say that within five years, mobile phones in the United States will be able to make electronic payments, open doors, access subways, clip coupons and possibly act as another form of identification. These futuristic uses for phones are becoming reality in countries like South Korea and Japan, which typically are ahead of the United States in mobile technology.

At the end of 2008, there were an estimated 4 billion mobile phone subscriptions worldwide, according to the International Telecommunication Union. That’s about two cell phone subscriptions for every three people. By 2012, 190 million people will make mobile payments.

The technology that turns phones into credit cards and IDs poses several potential problems. If phones replace wallets, would-be thieves will see every person walking down the street talking on his or her phone as a target for robbery. It would be the ultimate form of identify theft.

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Squeezing the contents of a person’s purse into a phone relies mostly on a technology called near-field communication, which allows any enabled device to communicate with a cash register through a secure radio frequency. The technology is similar to the scanners and passes that allow commuters to pay for drives on a highway without stopping at a toll booth.

When a phone is enabled with near-field communication technology, shoppers can load bank and credit card information onto their phones and then scan them to buy goods at the grocery store, shopping mall, metrorail or any other place set up to read the device.

Similarly, phones could include scannable identification information. Eye scans and fingerprints would make phone IDs and payments more secure. The ID technology might work like a corporate security badge, which pulls up personal information when scanned.

Some hotels have played with the idea of using near-field communication technology to enable a guest’s phone to act as a room key.

People can make transactions with their phones through lower-tech means, too. Mobile banking apps use the Internet to allow people to transfer money and purchase goods online. And in some parts of the world, including India, text messages sent by mobile phone are used as a form of currency.

iPhone users in the U.S. and elsewhere already can upload plane tickets onto their phones and then scan a digital version of the ticket’s barcode instead of presenting paper tickets. USAA Bank has recently launched an application to deposit your check via iPhone.

There is hope that, eventually, bank customers here may have individual barcodes they can use to purchase goods in stores.

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