Are you ready to use your phone as a debit card? An ATM? How about even as a shop till?
Make no mistake – the mobile money revolution is underway, whether we’re poised to join in or not!
But how do we feel about turning today’s ubiquitous social tool into tomorrow’s virtual bank account? With all the convenience but also the security worries that could bring?
The technology is heading our way…
Some of today’s newest smartphones are already equipped to act as a virtual debit or credit card. In New York, Google is currently trialling their ‘Wallet’ virtual payments system in a select number of retailers, with Android mobile phone users giving the technology a try.
The advances that make this possible are components called NFC chips. This stands for Near-Field Communication: some smartphones already have NFC chips inbuilt, and it is speculated the next iPhone will follow suit.
In theory, NFC chips also enable phones to act as a POS (point of sale) terminal to receive card or phone payments. Soon, the Chip and PIN device could become a thing of the past, as this means that every shopkeeper who owns a smartphone potentially also has a card terminal.
This opens up big opportunities both for businesses and consumers, with convenience and lower cost the big attraction.
But how do we feel about jumping feet first into that kind of future?
Mobile payments: convenience, or calamity?
For a start, we shoppers will be able to consolidate all our payments in one device. This should make it easier to keep full control over our financial matters at any time – far beyond the functionality offered by today’s mobile banking apps
Virtual payments could also include managing your vouchers and coupons. You could also store the full history of your transactions, so you know where your money’s going.
Meanwhile, businesses will be even better positioned to benefit from the rich information captured at every transaction. As well as the prices paid and the products purchased, they could also potentially gather location and demographic information about their customers.
So it’s obvious why businesses and advertisers would like to have this extra information about us. But how comfortable are we shoppers about this? Do we want to be open about everything we pay for?
I for one would want to know who gets access to this information. Will we need multiple payment identities and a way to block information from being stored or disclosed?
And how secure will we feel when we’re holding our phones containing lots of personal information against a reader that could be picking up all sorts of wireless data?
My hunch is that people don’t consider their mobile phone as just another “card” to hold up to a reader, but are much more protective of it.
Still, I don’t think we’re going to delay the advance of this new technology for long… because the pioneers in this case are not the developed Northern and Western countries, but the fast-growing emerging economies.
Phone banking is already a reality elsewhere in the world
If you need evidence that the big vision of a cashless society is getting closer fast, just pay a visit to Kenya.
There, the M-PESA mobile payments system gives citizens access to banking services in a country with a poor banking infrastructure. Not only that – it has also reduced crime. Robberies have fallen since the technology reduces the amount of cash people have to carry, and corruption has dropped since there is no longer a ‘middleman’ in cash transactions.
Needless to say, the intrepid Scandinavian countries are also ahead of us in giving this a try. Buses in Sweden have introduced cashless payments; predictably, robberies of bus drivers were immediately reduced.
Are you worried at the thought of a mobile money revolution?
The head-scratcher is, of course, how secure you will feel when you’re carrying around a device that holds all your important identity information and enables you to lead your life. Will you ever dare to take it out of your pocket for fear of having it stolen?
Even so, the question is no longer “could your phone become an all-purpose banking and identity management device”… It’s “how soon will that happen”?
And more pertinently: “Are you ready?”
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