The cell phone and the wallet: a marriage made in heaven?


When they first appeared, cell phones were single-use devices. Aside from using the large, brick-like casings as blunt instruments for self-defense, the only possible application for them was to make telephone calls. Since then, of course, they have evolved into smartphones and things have changed. For many people, these small, powerful units have already replaced the paper notebook, address book, and day planner. Now, they may be on the verge of replacing the wallet, too.

Intuit, the developer of the QuickBooks financial software, and Mophie, which makes battery pack-enabled cases for mobile phones, have launched a mobile credit card payment solution that lets users collect payments easily using their iPhones. The case allows users to swipe a card, and then uses an iPhone app from Intuit called GoPayment, to process the order. A receipt is electronically sent to the customer. This turns a mobile phone into a payment terminal, making it useful for everyone from pizza delivery companies through to people working on fruit stands who need to take payments quickly and easily.

This makes it possible for anyone to be a credit card merchant, but what about for consumers? Are we any closer to using mobile phones to make payments, rather than merely receive them?

Organizations have been experimenting with near-field communications (NFC) technology in cell phones for some time. NFC devices are essentially RFID tags that can be used to relay information to nearby readers. The availability of NFC solutions from major credit card companies (allowing users to wave their credit cards near a reader to pay for small items) has created a potential platform for the merging of cell phone technology with NFC payment systems.

Cell phone vendors do not seem particularly eager to integrate NFC technology directly into their phone devices yet. They may be discouraged by potential effects on battery life, and by the cost of the extra electrical components. However, some trials have been undertaken.

While retailers and banks wait for vendors to climb on board with such technology, others are taking a more low-tech approach to enhancing phones. In Germany last year, banknote and payment solutions company Giesecke & Devrient launched a sticker system called Convego. Customers receive an NFC-enabled sticker in the mail that they attach to their mobile phones. They can then use their phones as payment devices, touching them to a suitably-equipped POS terminal to make small payments directly from their accounts. Trials using such technology are now taking place in Canada and elsewhere.

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Others have an even more novel solution. Bump provides an app signed to exchange information between two phones. Two phones loaded with the Bump app and in close proximity to each other can be put into 'bump' mode together, and made to send their owners' contact information to each other. Although the phones are close together, the data is sent between them via Bump's central servers on the Internet. This makes the application workable, even if there is no common Wi-Fi network available to connect devices in the same room, and the phones are on different 3G networks.

With thousands of devices simultaneously involved in 'bumping' sessions around the world at any one time, the company has to ensure that phones are only connected with others in close proximity to them, so that contact information isn't sent to another unrelated unit halfway around the world by mistake just because it happens to be 'bumping' at the same time. The service uses the GPS capability of the phones to locate devices that are using the service. When the owners of two phones simultaneously set their devices to 'bump' each other, the phones relay their locations to the company's servers. The servers ensure that only phones that are close to each other are involved in the same Bump session, and gives them the go-ahead to exchange contact information.

Now, Bump is expanding. In addition to providing a useful way to exchange virtual business cards, the service has been made available as an application programming interface, meaning that other service providers can use it to facilitate the exchange of information between their own applications. Paypal has already released an application allowing mobile phones to send money to each other purely by 'bumping', and other mobile payment applications are sure to follow suit.

In an age where mobile phones are smart enough to talk to other phones in the same room, ubiquitous mobile payments are surely not far away.

Anthony Plewes

After a Masters in Computer Science, I decided that I preferred writing about IT rather than programming. My 20-year writing career has taken me to Hong Kong and London where I've edited and written for IT, business and electronics publications. In 2002 I co-founded Futurity Media with Stewart Baines where I continue to write about a range of topics such as unified communications, cloud computing and enterprise applications.