With the rise of debit cards and the increase in the use of services like PayPal, fewer people now rely on carrying cash in their wallets to make everyday transactions. Well now the wallet itself might be in danger of disappearing from purses and back pockets as more cell phone manufacturers begin to embrace the concept of the e-wallet.
Visa already has plans to launch a service in the second half of 2012 that will enable people to transform their smartphones in virtual wallets capable of paying for dinner and a movie, plus the cab fare home. Using Near Field Communication (NFC), a short-range wireless mobile technology, customers will be able to hold their phones up to a terminal capable of communicating with the device, and automatically have the money for their purchase charged to, or deducted from, their account.
While the technology that powers the e-wallet has been around since late 2008, cell phone manufacturers have been slow to fully embrace the technology’s potential. Google has already added some NFC abilities to its latest Android update, and has plans to integrate a mobile wallet nicknamed “Cream” into the next generation of Android phones. Apple is also rumored to be considering adding NFC chips to the iPhone 5.
In an attempt to establish a early foothold in the market, Visa is offering customers a microSD memory card that can be inserted into the back of most current model smartphones. This chip will enable smartphone owners to immediately begin using a virtual e-wallet instead of waiting for the release of a NFC integrated phone to hit the market.
Trials of the new system have already launched in New York and Los Angeles, and Bank of America, Chase, U.S. Bank, and Wells Fargo all have plans of launching their own trails in the near future. E-wallets have already made inroads in such countries as Japan and Korea, while places like India and Brazil will begin using the system over the next couple of years.
As for consumer protection, the NFC software contains anti-fraud protection that will alert consumers in real-time if the system believes a consumer the victim of a fraudulent transaction. And unlike debit or credit cards that can be cloned or stolen, each NFC transaction generates a specific transaction code that links it directly to the users smartphone.
Timothy Lemke is a freelance writer living in Portland, Oregon, who recently experienced a dental emergency that made him appreciate the need for fast payment options.
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