Wallet-phones featuring "contactless" transactions are inevitable. It is not a question of "if" but "when": when you are able to make all your transactions via cell-phone. In Japan, 50 million people currently use cell phones to make purchases, borrow library books and ride the subway. They simply wave their cell phones across a glass-covered infrared signal, instead of pulling out the
dead cow skin, handing over the cheap plastic, signing with the dirty pen, and stuffing the paper into a clump that will eventually land in the garbage.
Japan began this service of contactless transactions in 2004 through a partnership between NTT DoCoMo, Sony and Sumitomo Mitsui Financial Group. Contactless payments are now a common feature of Japan's wireless landscape. The service uses a technology similar to Bluetooth called Near Field Communication or NFC. NFC, with shorter range and lower data feeds than Bluetooth, provides for better security. NFC, more importantly, has a shorter set-up time than Bluetooth, making for smoother transactions. Japan's version of NFC is called
Felica and is produced through a joint venture between Sony and DoCoMo.
Japanese cellphone manufacturers, telecom operators and financial institutions have been cooperating for years in the development and deployment of Wallet-phone technology, leaving the US and Europe lagging far behind. Why can't the U.S. get their act together and get with the program?
Developing and deploying a service like wallet-phones requires the cooperation of three major industries: finance, telecom operators, and phone manufacturers. Wallet-phones also present regulatory and infrastructure issues that require complex congressional approvals.
The future, despite all these hassles, looks bright.
Javelin Strategy projects 700 Million wallet-phones worldwide by 2013, and currently
Visa is developing software for Google's
Android system that will facilitate contactless payments. Hopefully, the wallet will soon be joining the Sony Walkman and the typewriter in your closet.
[From
Reuters]