In a concept that is not entirely new, attempts are being made to transform the Smartphone into a credit card. What was attempted with limited success by a lot of online wallet platforms (such as the Google Wallet) is now being put into practice by some major banks such as Barclays and JPMorgan Chase. This is currently being carried out in a brand specific way that is limited to some companies but eventually looks like it could transform into a global movement that transforms the mobile phone into a substitute for a credit or debit card.
Is it sensible to bank through the phone?
Looking at present industry estimates, mobile payments are set to cross the $670 billion mark by 2015. This shows that already, through their existing payment modes like credit cards and debit cards, people are using the phones to do internet transactions. This makes it an extremely sensible move by credit card companies to eliminate the middlemen and payment portals that are involved and give the card users a secure gateway allowing them to transact seamlessly through their phones. It is safe to say that anybody who uses a credit card will carry a mobile phone. Therefore, it makes a lot of sense to club the two things into one and give the user options to pay through his mobile phone.
How can this be done?
While the system that eventually develops could be very different, one very simple way of using the phone for payments has been conceived. This mechanism however, eliminates the need to have credit card companies and unless major players like MasterCard, Visa and American Express actually delve into this domain, they may find themselves becoming obsolete. Just like a credit card, the bank allots a unique identification code to the customer or more specifically, his mobile device. This is protected through a series of encrypted codes, secure payment gateways and passwords. Thereafter, the user simply receives a certain identification number of the party to be paid, and makes the payment. In fact, as a secondary advantage, this could also eliminate the long queues at the payment counters. Alternatively, the retailer could provide the users with an account specifically for shopping with them modeled on similar system architecture as that of a credit or debit card. This could be done through the development of specialized applications developed for various mobile phones or through a specified web portal.
Are there any similar services being used presently?
Google Wallet and various other loyalty reward programs have been doing this for quite some time. However, they require your credit card information to be entered and they do not eliminate the need to have a card. Standing in the grocery store, you may find some difficulty trying to pay through Google Wallet. However, certain apps that have come up, with most being retailer-specific, the user can pay using a mobile device while sitting in the retailer’s office without having to swipe your card. Some of these are payment applications Seamless, GrubHub, LevelUp, Paypal etc. enable similar services. None of these apps however offer the customer independence from using a credit card and paying all the heavy fees involved. However, this is the future of mobile banking.
Geoff France writes on topics related to technology and provides tips for the same. He runs a wesbite , wherein, he offers the best deals on mobile phones.