Your Mobile as Credit Card?

Thread Title:
Momentum Is Gaining for Cellphones as Credit Cards
Thread Description:

The NYT have an good piece about the technology behind using cellphones as credit cards this morning:

In Asia, phone makers are already selling phones that users can swipe against credit or debit card readers, in much the same way they would swipe plastic MasterCard or Visa cards. Trials are now under way to bring the technology to America, industry executives said.

The marriage of cellphone and charge card poses some significant challenges, including security problems. To reduce fraud from stolen phones, consumers may be required to punch an authorization code into their phone each time a charge is made.

For more than a year, phone makers, software companies and computer chip manufacturers have been working to develop secure and reliable payment technology for cellphones. After the phone's chip is recognized by the electronic reader, the credit card account number will be verified, as it is now, and the price of the purchase will be added to the consumer's credit card bill.

The new phones may also be capable of being programmed for a prepaid sum from which payments could be deducted.

Sounds like a sensible idea to me, if you can overcome security issues and genuinely make it more convenient than a regular credit card I can't immediately see anything but benefits.

I do wonder how that would translate to purchases online though?


Will that be cash or cell?

I have maintained that service providers will somehow get into the credit card biz.
I make this point here.

Purchases online?

Well assuming they make a half-decent tech rollout then there would be a number of ways you could make it work online.

For example;
A merchant could pass a payment request to the mobile company, who then make that request available to the customer in realtime. That customer uses their phone to approve the payment, which updates the mobile companies database and "unlocks" that payment. Finally *something* informs the merchant the payment has been unlocked, which completes the transaction.

Dialing for Drinks

I understand that there are a few vending machines that have a phone number attached to them. You choose your favorite flavour of soft drink or snack, then dial up the phone number on the front of the machine. Your cell is billed (like a 900 number) and you get your snack.


Bar codes?

One thing that struck me was that for online you might use a barcode - this technology discussed in this post for example could be used to point your mobile at the screen and click! All done...

Im not sure haw viable that is but it seems halfway reasonable..

Website Payments

A long time ago I had a BBS (remember them?) that used a 900 number for access. You could dial in from anywhere and get access, and billing was handled by the phone company - I didn't have to touch a credit card or have a merchant account, etc.

I understand you can use the same idea today for certain websites - you phone a number associated with a product, punch in a numeric code to unlock the service, and the per minute charge is set to the cost of the product.


someone will make a fortune if they get into this quick

This was announced back in October ( and has actually existed online and for remote purchases in The UK for a while, albeit in a very limited way. There was a lot of discussion about it a while ago, but if you think about it paying for something using your mobile (cellphone) is a brilliant way of allowing people who don't have credit cards or who've maxxed them (like impulse buying teenagers for example) pay for goods online, it works for ringtones, screensavers etc now, why would it not work equally well for cinema tickets, DVD's or train tickets, provided there's some type of security code involved if delivered to anywhere but the mobile number. I don't see myself ever paying for a new TV on my mobile but if they were prepared to let me and didn't charge interest then I guess I might.

Offline I would say fast food places would get more trade form it. Often at 2am I have only enough cash for a taxi and Burger King doesn't take credit cards. My mobile's normally in my pocket though :)

I'm not sure on the legalities of a mobile phone company providing what is basically a credit service etc etc but it seems to me there's a huge opportunity here for the first major player who provides the facility properly to e-commerce sites.

IMO it would be best done in house by a mobile services company (Vodaphone seems most likely if I had to guess) but I only know of offering the principal commercially now, although there's a company in spain doing it too I think.

It will happen.

I saw demonstrations of the exact application that DQ and Gurtie mention above at a Smart Cards and Plastic Cards exhibition a couple of years ago, I am surprised it has not made more headway since then.

The trick is to monetise micro payments economically, still the hurdle to overcome.

WPKI System Launced in Kuwait

Using WPKI (Wireless Public Key Infrastructure - a 4 digit pin code) they've actually just deployed a mobile pay by mobile system in Kuwait:

Burgan Bank, the country's leading technological bank and Wataniya Telecom, Kuwait's most advanced mobile operator, today announced the first major step in the region towards true mobile commerce that will allow consumers in Kuwait to use their mobile phones for retail purchases with a quick and easy payment process using the highest security standards in the world.
Using the Wireless Public Key Infrastructure (WPKI), customers will have a 4 digit code that will identify them to the retail outlet and the bank, in order to permit and approve any purchase or transaction. The technology runs on WAP-enabled handsets. It is a world class security standard, approved by the European Telecommunications Standards Institute (ETSI). It is widely used by leading international banks.

Cool eh?

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