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Time to Pay the Bill? Reach for Your Phone, Not Your Wallet

How attached are you to your car keys? Your wallet? Your cell phone?

These three objects are kept secure by our side every day because they hold access to very important and valuable information.  I can’t count the number of times I misplaced one of these items and started to panic as I tore apart the house searching for it. If only they had built-in pagers…

With changing technology, one of these items will become even more important than before! Cell phones have been adapted to fit our own personal lifestyles – so much, in fact, that they may soon be capable of replacing your wallet.

Companies such as Google® and Apple are currently developing and testing a way to consolidate your credit and debit cards as well as coupon offers to your personal mobile device. Just walk up to a participating vendor and wave your mobile device over the contactless payment system, and you’re finished. If you have coupons that you would like to use or a store rewards card, just open your virtual coupon book within the app and swipe the bar code over the scanner.

You may recognize a similar payment technology known as Speedpass® that was introduced back in 1997 by Mobil, now known as Exxon Mobil, which allowed customers to activate gas pumps using a tag.  There are very similar systems used all over the world as well. The most successful contactless payment system is in Hong Kong, called the Octopus Card. So successful, in fact, that there are over 20 million in circulation. That’s three times the population of Hong Kong!

With those numbers in mind, Google and Apple – along with other companies such as Visa® – are competing to develop a mobile payment system in the United States.  To ease the minds of people concerned about the theft of mobile phones and personal data, providers say they could deactivate the virtual credit cards much as a bank would cancel a stolen card. They have also taken many precautions to prevent such outcomes. The “Google Wallet” pay-by-phone system will also require a customer to enter a password before making a payment with the phone.

While such mobile payment technology may sound exciting to many smart phone activists or those soon-to-be, compatible cell phones won’t be available until late 2011 into next year.

Those days of the all-around pocket checks for your wallet, keys and phone are numbered. And when a mobile phone gets lost, you can always call it – making it easier to find than a wallet or keys!

(Google is a registered trademark of Google Inc.; Speedpass is a registered trademark of Exxon Mobil Corp.; Visa is a registered trademark of Visa International Service Association.)

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Posted in Banking Basics, Business Resources, Financial Education.

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