Cell Phones and a Cashless Society

Don't Pay by Cash or Check: Use Your Cell Phone Instead

May 7, 2010

Walletpot.com - Are you ready to give up cash and checks and start using your credit card exclusively? You might just be able to do that -- if you own a smartphone.

Seems that now that almost everyone with a cell phone is quickly exchanging it for a smartphone, several companies are betting good money that these phones will be used for almost everything -- including paying for your morning cup of joe or the drinks at that cash-only bar after work.

According to The New York Times, cash as payment has declined as debit and credit card use has risen. And now, mobile-payment technologies from PayPal, Intuit, VeriFone and Square are making it even easier and more affordable for anyone from your housecleaner to the farmer you buy heirloom tomatoes from to start taking credit card payments.

Love it or hate it, it seems that most companies are betting it will become part of the new financial landscape. Google recently acquired Corduro, a company that offers online and mobile payment technology, and Visa recently purchased CyberSource, to also expand its mobile technology endeavors. Mobile commerce is definitely expanding, with much of the enthusiasm coming from teens and young adults who've already adopted the technology on Facebook or other social media.

So far, the U.S is lagging behind in mobile payments (developing countries like Kenya and the Ivory Coast have already embraced it), but companies are betting on young people expanding its use. The new technology is also looking to make taking credit card payments cheaper for retailers and drive people away from the more traditional credit card companies.

A while back, I wrote about PayPal's new partnership with the iPhone, that allows iPhone users to pay one another by using their cell number or by bumping phones together. At this point, that form of payment is still limited to iPhone users only and isn't recommended for retailers.

For those who want to use a credit card, the new cell-phone-as-credit-card-processor can be created by inserting a small piece of hardware into a smartphone; anyone from a street performer to a shoeshine vendor can then swipe your credit card. This new kind of payment system is likely to become even more popular with smaller retailers because of the danger of bounced checks or fraud, the bane of small merchants everywhere.

With mobile payment technology still in its infant stage, consumers haven't yet committed to any one kind of technology. According to the San Jose Mercury News, other methods for consumers include an RFID sticker that sends a signal, a method currently being promoted by Bling Nation, a startup that has partnered with regional banks; MobiBucks, which uses a phone number and PIN to access one's account; and Obopay, where users can text message a payment or go online to transfer money. While dozens of startups are flooding the market, trying to hit on that perfect system to attract millions of users, so far, there are no frontrunners.

UK Consumers Want NFC on Their Mobiles

O2 Wallet trial reveals 78% want to use contactless services on their mobile phone

September 2, 2009

Francesco Iarlori - The prospect of using your mobile phone to make purchases or pay for travel took a step forward today with the results from Europe’s largest trial of Near Field Communications (NFC) technology on a mobile phone revealing clear consumer demand for such services.

Nine out of ten trialists were happy using NFC technology on a mobile phone and 78% said they would be interested in using contactless services if available. Convenience, ease-of-use and the status of having such an innovative device were seen as the main benefits.

Interest in having Oyster on their mobile phones was particularly strong with 89% of trialists saying they were interested in taking this up. Over two-thirds of trialists also said that they would be interested in having the Barclaycard Visa payWave feature on their mobile in the future.

The O2 Wallet trial took place over six months between November 2007 and May 2008 and involved 500 trialists. It tested consumer demand for having cards you would normally carry in a wallet, such as Oyster and credit cards, available on a Nokia 6131 NFC mobile phone. To travel on London’s transport system or make purchases in retail stores, the user simply touched the phone against a reader. The trial involved a range of industry leaders including O2, Transport for London, Barclaycard, Visa Europe, TranSys, Nokia and AEG.

“Imagine going out for the night and only taking your mobile phone with you” said Claire Maslen, Head of NFC. “This trial takes us one step forward to achieving this by demonstrating that people want the convenience and practical benefits offered by services like the O2 Wallet.”

Oyster on Mobile

Having Oyster on their mobile phone actually increased trialists use of public transport. One in five (22%) trialists using Pay as You Go Oyster reported that they increased the number of journeys they made on public transport during the trial. Overall, almost 50,000 tube journeys took place using the O2 Wallet during the six month trial.

Other key findings around Oyster on mobile include:

• 67% said that they found it more convenient to use than a standard Oyster card.


• 87% said that availability of the service would be likely to influence their purchase of a new mobile phone.

Contactless Payments on Mobile

A selection of trialists were provided with the Barclaycard Visa payWave application on the Nokia 6131 NFC mobile phone and following the trial over two-thirds stated that they would be interested in using cashless payments on their mobile in the future. In addition, nearly half (47%) of trialists stated that being able to use their mobile to make payments would influence their choice of handset in the future.

Insights for future services

The trial provides crucial insights into helping O2 and its partners ensure that the customer experience is right before bringing the O2 Wallet to market:-

• Choice of handsets is crucial – 85% of trialists felt that the make and model of the handset would influence their decision to take up NFC services


• User Interface – while the UI was popular, trialists wanted the ability to manage their accounts and view Oyster and Barclaycard balances through the application


• Security – while this was an important consideration, trialists wanted speed and convenience from using their mobile phone but could see the benefits of being asked for a PIN periodically to enhance security, similar to the contactless card experience today

Claire Maslen continued:

“In theory, any card that you carry in your wallet could be on your mobile in the future. To make this a reality we need to work across industry with a shared vision of what commercial services will look like. To that end O2 will be proposing an industry taskforce with the aim of bringing together mobile operators, handset manufacturers and key players from the transport and finance sectors to form the foundations for commercial NFC on mobile services.”

About the O2 Wallet Trial

NFC is a contactless functionality, enabling a wide range of secure uses including cashless payments, public transport, event ticketing and smart posters.

The six-month trial, which involved over 500 existing O2 customers, took place across London using a Nokia 6131 NFC mobile phone installed with the O2 Wallet application. Just like a normal wallet, this held various everyday cards, including Oyster and Barclaycard Visa payWave, but in virtual form. The trialists were able to use their Nokia 6131 handset to pay for travel on the Tube, buses and trams across London and also top-up their Oyster at Oyster ticket machines.

The Barclaycard Visa payWave payment application was also installed on the handset, enabling trialists to make ‘contactless’ payments for £10 and under at the growing number of retailers across London including Books Etc, Chop’d, Coffee Republic, EAT, Krispy Kreme, Threshers and YO! Sushi. As well as making payments, participants could also use their Nokia 6131 NFC mobile phone to locate local retailers ...