Throughout Japan, Korea an across Asia, many consumers are already using their cellular phones as credit cards. In the United States tests are already underway to bring this bleeding edge technology into the hands, onto the belts, and pocketbooks of the average American consumer.
The dream of technologists and marketers alike is to develop a contact free transaction system. For credit card purchases to be completed today's consumers, they must remove the card from their wallet or purse, have it "swiped" and then sign an authorization system. For small purchases or micro payment systems the paperwork and manpower required for these kind of transactions make this a money losing operation.
However plans are under way to make a payment system to eliminate all of this overhead. Tentatively dubbed "PayPass" consumers will only be required to wave or place the phone near a payment device. The system builds on the existing technology currently used by the EZ-Pass or E-Pass toll payment systems, and the pay-at-the-pump "SpeedPass" system used by Exxon-Mobil. In addition to the technological hurdles that must be overcome, merchants need to be convinced to invest in the hardware and integrate it into existing Point-of-Sale (POS) systems. Two merchants who have initially signed on are the CVS Drug Store and McDonalds.
Perhaps the largest concern from a consumer standpoint is security. The most likely solution will require a 4-8 digit pin to be entered into the phone for the payment system to be activated. As a secondary security measure many favor is placing a balance on the phone limiting each customer to liability amount they are comfortable with.
The last major obstacle is the wireless providers themselves. As cellular services have difficulty reaching a consensus on business critical items, such as communication standards, many doubt they will be able to come together to agree upon a payment system to be universally accepted.
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Author
Edward Nelson is an author specializing in articles about consumer electronics and technologies. He has written other articles including
Cell Phone Trends, Cell Phone Features, Cell Phone Accessories, Understanding Cell Phone Batteries, Understanding Digital Communications, Cell Phone Antennae Boosters, Internet on Your Cell Phone, Bluesnarfing - Is Convenience the Price of Security?, Cell Phones as Credit Cards
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