I've bought things with my cell phone. Why, just yesterday I bought a new
ringtone. It was downloaded right to my phone and everything.
But that isn't the type of buying we're talking about. We're talking about
dinner, a movie and bus fare (don't count on a second date).
The practice has already been put into use in Japan, where you can transfer
money to a mobile-phone wallet and pay for items by simply waving the phone
within a few inches of a special display. These payment-readers use radio-frequency
ID technology to instantly purchase items from stores, restaurants, video arcades
and vending machines around Japan.
These radio-frequency chips are not the only method being developed, and
the technology is still evolving. Some other techniques also include texting,
special cell phone money accounts and adding purchases to your monthly cell
phone bill.
PayPal Mobile
PayPal has just announced the launch of its new service that allows their
subscribers to access their current accounts through text messages with their
cell phones.
By sending a simple text message to PayPal, subscribers can transfer cash
to a friend or purchase a product from a merchant, who will then ship it as
if it were a typical online PayPal transaction. It can also be used to make
electronic donations to charities.
Anytime you see "Text to Buy" next to something you want to buy – on
a poster, in a magazine, at an event – you can securely order the item
by text message.
After sending your text message, PayPal calls you back to confirm the order
and asks for your mobile PIN number. When it is confirmed, the item is shipped
to the address listed in your PayPal account. This method confirms that the
customer actually owns the phone that he or she has activated. If a call is
dropped before payment details are complete, you can send it again without
worrying about paying twice.
Just like their traditional service, PayPal Mobile is free to send money,
though wireless carriers may charge fees for receiving text messages.
Obopay
Instead of using the credit card attached to a Cellular Wallet for each
transaction, you can load up an Obopay account once and draw on it when needed.
Obopay customers create special accounts which allow account-to-account transfers.
Parents can send money to their kids or friends can split restaurant bills.
After the money has been transferred it is instantly accessible via the Obopay
debit card.
Banks & Financial Institutions
Credit card companies and banks are planning to embed a new form of radio
frequency technology into cell phones that will allow customers to wave their
cell phones at a point-of-sale reader, which will take the credit card or debit
card information that has been electronically inserted into the phone to process
the transaction.
Thousands of retailers and restaurants like McDonald's, CVS and KFC have
already begun installing electronic readers. Currently, however, there is only
one phone, the Nokia 3220, that can support the new payment chip. Other companies
like Samsung and Motorola are also working on phones with e-wallet capabilities.
Security
Cell phone-wallet transfers will actually be safer than traditional credit
cards because the data will be encrypted when it's transferred without anyone
seeing the actual credit card number or holding your phone.
A lost cell phone is also easier to detect than a missing credit card, and
the device also offers users the ability lock their phones with a pass code.
And in the event of a stolen phone, the payment portion of the phone can be
shut down through a call to your bank.
Promotions & Rewards
By purchasing items using your phone you may also receive alerts about
sales, in-store coupons or exclusive loyalty rewards. This might save you some
bucks or have you blow you budget depending on exactly what type of deals they
pass along. The idea is nice in that you can see where you might be able to
save some dough on something you were going to buy anyway, but I'm a little
concerned by the possible number of alerts I may receive. Personally, I may
steer away from certain purchases if I face the prospect of a new breed of
telemarketing.
Cellular Banking
Another benefit of using a cell phone over a credit card or a key fob with
a chip is that it will make it easier for users to manage their money. Many
of the banks are working to allow their customers to check on their balances,
transfer funds and pay off bills from their cell phone.
Cell phones have experienced a rapid evolution, and the technology is so
adaptable that it shouldn't surprise many that they may replace credit cards
the same way that credit cards have replaced our cash purchases. Think of all
of the purchases you can only make by credit card. How differently will we
purchase items as this technology develops? I, for one, can't wait to find
out.
