Flash forward to today's world of e-mail-ready smartphones and 3G wireless access. If you think those are handy, then get ready: Newer technology is emerging that will significantly change how we stay in touch when we are mobile -- nearly as much as telephones and airplanes have changed lives over the last 100 years.
Pay By Phone
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Pay By Phone
Old way: Pull out your wallet and pay with cash, debit card, or credit card.
New way: Your cell phone acts as a mobile wallet; you wave the device at a point-of-sale reader to make purchases.
The idea of using your phone to make payments has been around for several years but is finally gaining serious traction, starting in Japan where NTT DoCoMo, Japan's largest cellular carrier, launched its mobile wallet program in 2004. Now, according to Karen Lurker, communications manager in the U.S. for DoCoMo, there are almost 12 million handsets in the hands of DoCoMo users that support the company's mobile payment system.
These phones -- and those that are expected to be introduced soon in the U.S. -- use a wireless technology called Near Field Communications (NFC). You wave the phone near a point-of-sale terminal that supports the technology, and it automatically pays for the item.
How? DoCoMo handles payment two ways, according to Lurker. The first is DoCoMo's Osaifu-Keitai service, which enables you download credits worth as much as 10,000 yen per month, or about $95, to your phone via the company's i-mode data service. When you wave the phone in front of the terminal, the amount of the purchase is deducted from the amount of credit carried on your phone. The amount you actually spend appears on your monthly cell phone bill, according to Lurker.
With the second method, the phone works like a credit card, with your bill being sent to you separately by the credit card company. Ultimately, you'll be able to download your spending information to software on your PC so you can monitor your expenses, Lurker said.
A major limiting factor is that merchants must buy new point-of-sale terminals. However, that's starting to happen quickly in Japan, Lurker said. There are currently about 78,000 stores with terminals that support Osaifu-Keitai and about 25,000 that work with the credit card-like service, with DoCoMo projecting a rapid ramp-up, Lurker said.
While credit card companies in the U.S. say they are working on supporting similar systems, NFC has had a few minor successes here. In particular, Exxon Mobil's Speedpass uses NFC technology -- you wave a "key" in front of a sensor on a gas pump, and the transaction is automatically charged to the credit or debit card you designate.