Thursday 23rd June 2005

 

Cellphones playing role of wallet

 
 
 
 
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Already a device of multiple disguises, from camera to music player and mini-TV, the cellphone’s next trick may be the disappearing wallet.

After all, since more than a quarter of the people on the planet already carry around cellphones, and hundreds of millions are joining them every year, why should they bring along credit and debit cards when a mobile device can make payments just as well?

At the simplest level, all that’s needed is to embed phones with a short-range radio chip to beam credit card information to a terminal at a store register. It’s not unlike the wireless system used to pay tolls on many highways or the SpeedPass key chain wand used to buy gas at Exxon Mobile Corporation pumps.

This is already a reality in Japan, where NTT DoCoMo Inc says three million cellphone subscribers use its Mobile Wallet service to buy things at 20,000 stores and vending machines.

Similar services may be on the way in the United States and Europe. MasterCard International Inc has been testing phone-based versions of its PayPass contactless payment technology since 2003, and may conduct a significant market trial next year.

But there also are more ambitious visions brewing that contemplate the cell phone as a new focal point for managing your personal finances.

The phone would supplant not only credit and debit cards, but wallets, checkbooks, Web sites, computer programs like Quicken, and online bill payment services such as PayPal or CheckFree.

While the mightiest players in Western banking have yet to embrace that notion, and some are dubious of the appeal, the concept has drawn interest in other regions and may get a tryout here soon.

A small technology company named C-Sam Inc recently succeeded in launching its OneWallet cellphone platform with corporations in the United Arab Emirates (UAE), India and Japan.

Executives for the Chicago-based company assert they’re about to sign on one of the biggest US banks and one of the nation’s top

issuers of store-brand credit cards to conduct trials of the platform, which can be used to manage a variety of accounts and transactions from a cellphone.

In the United Arab Emirates, OneWallet is being marketed by UAE Exchange as a convenience to that nation’s huge work force of expatriates from India who regularly wire money home. So far, there are about 400 users.

Alphonso Francis, a Bombay native who works for UAE Exchange in Dubai, sends money three times a month to his family in India.

The process usually is a drag. “I have to spend one-and-a-half hours in traffic, pay for my parking, and then spend another one-and-half hours in traffic... all just to make a transaction which takes only two minutes at the transfer house,” he said.

Now, using OneWallet on his phone, he enters his PIN number, designates which account the funds should come from, the recipient and whether it should go to a bank account or a Western Union-type outlet in India. The order is transmitted over the cellphone’s Internet connection in seconds.

Despite the logic of tying all your financial dealings to a device that many people keep by their side at all times, major credit card companies don’t see the phone as a convenient nerve centre for managing finances. The card companies’ main goal is to drive more spending—and card transaction fees—by making the phone a quick way to pay with a single designated account.

“The benefits of having a wallet on your phone with multiple cards are overblown,” said Murdo Munro, a MasterCard executive involved with PayPass. “If a consumer has to boot up an application on the phone, and then go through four or five menus, and then choose a card to make a payment, that's an awful lot slower and less convenient than just taking a card out of your wallet.”

The PayPass system aims to improve even on that step. A credit card number is embedded in a chip that is activated by waving it in front of a reader, ringing up a sale quicker than handing plastic to a merchant or swiping it.

(AP)

©2004-2005 Trinidad Publishing Company Limited

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