These days cell phones have become the
Swiss army knives for the technophile. They take photos, send instant messages,
handle emails, play music, simulate scrabble. So why can’t they pick up the bar
tab? In a recent New York Times article journalist Leslie Berlin looks at the
real possibility of a cell phone tap-and-pay system and why North America presents a unique
resistance to the technology.
The starting point for this topic begins in
Japan where cell phone manufacturers and businesses have readily embraced
a system in which consumers swipe their cell phones over an electronic pad at
the checkout. Such technology has been in mainstream in Japan for
the past five years, allowing citizens to buy everything from candy bars to
movie tickets by waving their phones. But the unique payment system isn’t
expected Stateside anytime soon. Why? Good old fashioned capitalism.
Within the Japanese market one major cell
phone service provider dominates over half the market. Given that clout the
implementation of the technology was streamlined according to their
specifications. Within the American market however service providers constantly
battle for supremacy in a very busy market. Attempting to get a unified,
cohesive set of standards is understandably proving a formidable task.
One of the major challenges is getting the
service providers and the banks on the same page. The technology essentially embeds
an electronic credit card in each phone, thus simultaneously making use of
service provider and bank resources.
The other major challenge will be
convincing North American consumers that such a swipe and pay system is secure.
One countermeasure that would be in place already exists for regular credit
cards; if lost, just call the company and cancel the service. The irony here,
of course, is that if you lose your cell phone you’ve also lost your most
immediate means to cancel the service. Other security measures include the
possibility of a pin-code, a rather counter intuitive option though considering
the entire process is designed to be convenient. And what powers this
technology?
Embedded in the cell phone is a device that
makes use of Near Field Communication technology that transmits the credit
card-like data wirelessly to a receiver at the checkout. At least one expert
believes that all cell phones will have the technology by 2012. Whether America
will be ready by then remains to be seen.
