Mobile Phones: The New Wallet

Your mobile phone probably hasn’t replaced your wallet yet, but it could in the next few years. Several retailers have tested or implemented in-store mobile payment systems, including Starbucks, which launched its mobile payment program at stores nationwide in January 2011. Using the Starbucks Card Mobile App, customers can pay for purchases with their BlackBerry, iPhone, or iPod Touch by scanning the on-screen barcode at the point of sale.

Starbucks Card Mobile App

Beyond mobile applications, advancements in near field communication (NFC) the wireless technology that connects devices over a short range of a few centimeters will drive adoption of in-store mobile payment systems.

NFC isn’t new, but it has recently created a lot of buzz stateside and companies are getting behind it. The NFC Forum recently welcomed 32 new members, including Google. Among the industry association’s highest level of members are Microsoft, Visa, MasterCard, Nokia, Samsung, and Sony.

NFC phones are already on the market. Samsung and Google launched the Nexus S with Android Gingerbread in December 2010. Nokia introduced an NFC mobile phone in the U.S. in 2007, but the company will launch the Nokia Astound, its first smartphone with an NFC chip, on April 6, 2011. Apple, Microsoft, and BlackBerry are expected to release mobile phones with NFC support later this year.

Wireless providers are even collaborating on NFC technology. In November 2010, AT&T Mobility, T-Mobile USA, and Verizon Wireless announced a joint venture to develop Isis, a national mobile commerce network that uses smartphone and NFC technology.

As major companies develop the infrastructure to support NFC and NFC phones get into the hands of consumers, mass adoption of in-store mobile payment systems seems inevitable. Both consumers and retailers will benefit from the simplicity and convenience of these tap-and-go systems.

I’m willing to leave cash and credit cards behind as long as NFC proves to be secure. How about you?

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Nadia Dawson

Nadia provides digital strategy and engagement support on several federal government initiatives. Prior to joining Ogilvy, Nadia worked as an Associate at ICF International, supporting online and offline marketing outreach efforts for the Children’s Bureau and its Child Welfare Information Gateway clearinghouse. Nadia holds a bachelor’s degree in Sociology and Studio Art (Digital Media) from the University of Virginia. You can follow her on Twitter (@nadiadawson).