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Tuesday, November 16, 2010

Mobile payment finally coming to the US

Cellphone based payment systems have existed in other parts of the world for years. Japan, Europe, and Canada all have some form of swipe-your-phone-to-pay system in place, and yet the service has never made its way to the US.

That's all about to change as AT&T, T-Mobile, and Verizon are all rumored to be backing the NFC (Near Field Communication) mobile-payment technology. This works by embedding a chip in the phone itself that acts much the same way those tap-to-pay credit cards work. Except that with a phone, you potentially have the option to bill the purchase to your phone bill, rather than a credit card. So it's easy to see why the mobile carriers are interested in this...they'd get a small cut each time someone swiped their phone.

The implications for location-based services like Foursquare, or even coupon services like Groupon are huge, too. Imagine how easy it would be for a merchant to accept a Groupon discount from someone who has the app on their phone, for example. The possibilities are endless.

No official announcement has been made from the three carriers, but if they really are all working together on this system, we could see it take off in a big way in the coming years. Oh yeah, and the upcoming versions of Android will reportedly have support for these payment chips built right in. [via AndroidGuys]

This is so cool. With smartphones being as crazy powerful as they are, I really don't see the point in carrying pieces of plastic in my wallet anymore. There's almost no reason why my phone couldn't serve as a payment device, except that it would mean building a new payment infrastructure. But it looks like the pressure to build that system might finally be growing. I say bring it on, I'll absolutely use it.

I think this is a really cool idea. I have a feeling a lot of people are going to be up in arms about security and  stuff, but this is no different than every other new technology that supposedly "threatens security." I would definitely use this, but since I won't be getting a new phone any time soon, it's going to be awhile. Also, I can't help but wonder how long this will take to really catch on. Those tap-to-pay credit cards are not really as big as I thought they would be. So few stores have the capability to even use them, and even when someone does try to use them, in my experience, the person at the register has no idea how it works. I predict it's going to be a long time before we catch up to where Japan, Europe, and Canada are with these (big surprise there).

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