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Personal Tech

THIS Will Be Your Next Wallet

  • Visa PayWave system

    Technology manufacturers and credit card companies are pushing for new standards for mobile payments -- relying on just a wave of your cell phone. (Visa)

  • Credit Card Payments on Smartphones

    The Mophie readers turns a smartphone take credit card payments, one of several ways to replace wallets with smartphones. (Mophie)

Are you ready to give up cash, and maybe even give up your credit cards? I'm not, but there are plenty of companies -- from Google to AT&T -- that think we will.

The idea has been around for more than 20 years but has never come to fruition, because the basic technological tools weren't readily available. Now they are. They're called smartphones.

Earlier this month, Google waved around a prototype Android phone with a special chip that lets customers pay simply by waving the phone near a cash register. Known as near-field communication (NFC), the trick is to use short-range radio signals to send your credit card or bank account information directly to a register so that you don't have to swipe or sign for things. Or get your hands dirty with all that filthy lucre.

In one sense, such technology is overkill. Many of us can already wave a credit card at the gas pump or Quickie Mart and have a sale immediately rung up on the register. Credit card companies call it contactless payment. But contactless payments use a one-way system where your credit card info is simply passed from the card to the scanner. You don't receive, say, any information about what you purchased or about what your current balance is on the card itself. 

Smartphones could give shoppers that important information, plus a digital receipt. And stores could incorporate electronic coupons on the spot ("You've just saved $1 on kitty litter, sir!"). Others could include their loyalty cards in a digital form that resides on your phone. It would certainly be more convenient; I can't tell you how many times I've forgotten that darn discount card for the hardware store.

Indeed, there are already third-party apps such as CardStar that let you store loyalty card info on your iPhone. Some retailers, like Tesco and Subway, also offer virtual cards as apps, but they're inconvenient: You have to open the app on your phone and have the checkout person scan a barcode off it. An NFC digital card would work automatically, without any scanning. 

As more and more people use smartphones -- already nearly 20 percent by some estimates -- companies anticipate they will also want to do away with credit cards and money itself. PayPal has already proven that giving people more control over their money online is something people want. Now it's focusing on mobile money transactions, too.

"You won't need your wallet when you walk out the door," Amanda Pires, senior director of global communications for PayPal, told "Your mobile wallet will be in the cloud."

Your banking balance, debit card info, and credit card account information will be stored online and accessed wirelessly and instantly whenever you buy something in a store. In fact, that information is already stored "in the cloud" on computer servers by your bank, it's just not automatically accessible with cash registers of the future.

PayPal envisions a cashless, cardless payment future, something Pires says the company is already experimenting with using an automatic payment system from Bling Nation. At the Facebook and PayPal campuses in California, participants can pay for their lunches using a Bling Nation-equipped phone; the money comes straight out of their PayPal accounts.

While such experiments are small, big players are planning to launch similar services nationwide. AT&T, Verizon Wireless and T-Mobile recently announced a joint venture called Isis to build a mobile payment network based on an NFC system. The first markets should go live within a year and a half. And Nokia and Google have indicated their new 2011 phones will be compatible with it.

In the meantime, mobile cashless services are already here for small businesses. Intuit, the company behind Quicken, has offered its GoPayment service for nearly two years.

"We enable credit card payments on your phone," said Andrew Freed, product manager for Intuit payments. Freed explained that using a smartphone app, street vendors, Christmas tree sellers, contractors, dog walkers -- and nearly anyone with a mobile business -- can accept payment immediately.

Although it's not required to accept credit cards, Freed is particularly excited by a new card reader that works with GoPayment and attaches to an iPhone. The mophie Marketplace reader costs just $180 and is considered slightly more secure because credit cards are required for the transaction (as opposed to simply entering the card number in an app). All the transaction information is encrypted, so it should be as secure as any other credit card transaction, and it can help small businesses avoid check fraud.

While this is ideal for businesses and customers on the go, it's still not the wireless, automated system proposed by NFC systems. Nevertheless, Freed says Intuit's service is designed to handle any transactions and could easily accommodate NFC services in the future.

The question is, are we, the shopping public, ready for a cardless, cashless system?

Certainly, there are benefits. A friend working a street fair recently revealed to me that counterfeit cash is a not uncommon problem; she was cheated out of $100 one day this way. Accepting wireless credit transfers would avoid this. And if you were to lose your phone, the credit and banking information is still protected by passwords and encryption programs, making it more secure than losing a wallet full of cash (assuming the thieves don't hack your phone before you alert your bank).

Still, while NFC systems and contactless checkout scanners require the device be within a few inches of the terminal, mistakes can be made. I recently had my card charged even though I was planning to pay in cash; I had waved the credit card a little too close to the terminal. And there's still some small merchants who prefer cash because they can avoid transaction fees altogether.

For me, however, the issue comes down to budgeting. When I use cash, I can't overspend. When I use a credit card, well, let's just say I tend to go over budget. And we all know what that can do to the economy -- personal and otherwise.

Follow John R. Quain on Twitter @jqontech or find more tech coverage at

John R. Quain is a personal tech columnist for Follow him on Twitter @jqontech or find more tech coverage at