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January 10, 2005 06:19 AM

Momentum Is Gaining for Cellphones as Credit Cards


Excerpt: People already use their cellphones to read e-mail messages, take pictures and play video games. Before long, they may use them in place of their wallets.

　 　

People already use their cellphones to read e-mail messages, take pictures and play video games. Before long, they may use them in place of their wallets.

By embedding in the cellphone a computer chip or other type of memory device, a phone can double as a credit card. The chip performs the same function as the magnetic strip on the back of a credit card, storing account information and other data necessary to make a purchase.

In Asia, phone makers are already selling phones that users can swipe against credit or debit card readers, in much the same way they would swipe plastic MasterCard or Visa cards. Trials are now under way to bring the technology to America, industry executives said.

Ron Brown, executive director of the Infrared Data Association, a trade group representing companies pushing the technology for cellphone credit cards, said that the new handsets could become "a major form of payment, because cellphones are the most ubiquitous device in the world." He added, though, that "cash will never go away."

Advocates say that consumers will readily embrace the technology as a way to pay for even small purchases, because it is less bother than taking a credit card out of a purse or parting with cash.

The impending changes to the cellphone happen to coincide with major shifts taking place in the banking industry. Since credit cards are still considered somewhat inconvenient, particularly for quick, small purchases, major credit card companies have developed "contactless payment" technologies for checkout counters that allow customers to wave their cards near an electronic reader without having to swipe the card or sign their name.

MasterCard, for example, has introduced a system called PayPass that lets cardholders wave a card in front of a reader to initiate a payment, much as motorists use E-ZPass and similar systems to pay tolls and ExxonMobil customers use SpeedPass to buy gas. Several major credit card companies issue PayPass cards; McDonald's has agreed to accept them at some restaurants.

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Online Banks Are Boosting Yields (January 15, 2005)
As interest rates start to rise, many online banks have already started to offer higher yields on many accounts. Traditional banks have been slower than their nimbler online counterparts to boost returns on many of their short-term cash-like investments. In recent weeks, many Internet banks ...
Online Banks Are Boosting Yields (January 15, 2005)
As interest rates start to rise, many online banks have already started to offer higher yields on many accounts. Traditional banks have been slower than their nimbler online counterparts to boost returns on many of their short-term cash-like investments. In recent weeks, many Internet banks ...
Rebels With A Cause, And A Business Plan (January 01, 2005)
AT times, Arkadi Kuhlmann can sound a lot like Eliot Spitzer or Suze Orman. He rails against the banking industry's high fees. He bemoans a financial culture that encourages people to save too little, consume too much and invest too recklessly. But Mr. Kuhlmann is ...
Banks Boost Customer Incentives, But Rates on Savings Remain Low (December 27, 2004)
Managing your financial accounts can be particularly taxing at year-end. In the fourth installment of a five-part series, Taking Account, we examine the trends in consumer banking, from cash incentives for opening a new account to fees for using a debit-card PIN. What's Going On ...

Read all 22 posts in the same category of Banking:

Going Online To Balance Family Budget - Feb 17, 2005
Banks Speed Process For Opening Online Accounts - Feb 04, 2005
Online Banks Are Boosting Yields - Jan 15, 2005
Online Banks Are Boosting Yields - Jan 15, 2005
Rebels With A Cause, And A Business Plan - Jan 01, 2005
Banks Boost Customer Incentives, But Rates on Savings Remain Low - Dec 27, 2004
Online Bill Paying: How To Get Started - Dec 27, 2004
Banks Test ID Device for Online Security - Dec 24, 2004
Paper Checks Going Bye-Bye? - Dec 08, 2004
Check It Out: Incentives to Pay Bills Online - Dec 07, 2004
'Gift Cards' May Come Loaded With Fees - Nov 29, 2004
Where To Keep Your Rainy Day Fund - Nov 29, 2004
What's Your Bill-Paying Personality? - Nov 28, 2004
Debit Cards Lack Protections Of Credit Cards - Nov 28, 2004
A New Era In Banking Begins - Nov 25, 2004
Automatic Debit Scams - Nov 22, 2004
Bank Accounts Fail To Follow Fed's Lead - Nov 12, 2004
ChexSystems Puts Him In Penalty Box - Nov 09, 2004
"Check 21" Starting in Late October - Nov 03, 2004
Gift Cards 04 - Nov 03, 2004
Save Electronic Checks for Your Taxes - Nov 01, 2004







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