Does the term “mobile wallet” mean anything to you? Just as most everything else is going mobile these days it was only a matter of time before the phenomenon replaced our wallets, along with all those bulging credit cards that we pack in them.
According to a report on CNNMoney.com, credit cards may soon be as outdated as vinyl records as more and more people use their iPhones, Droids or BlackBerrys to pay at the cash register or to loan a friend a few bucks just by “bumping phones.”
Michael Abbott, CEO of Isis, a new mobile payment network, was quoted by CNNMoney as saying, "This is the chance to bring payments forward from the plastic age and the vinyl records age to the digital age."
As smart phones get smarter, more people are expected to use them as swiping devices similar to credit cards to pay their bills in restaurants, movies, or wherever. CNNMoney says companies have been experimenting with contactless mobile payments for years and that 2011 is expected to be the year the technology really takes off because millions of new phones, capable of making contactless payments, are expected to be shipped out this year.
According to research firm Aite Group, pay-by-phone is forecast to make up $22 billion in transactions by 2015, up from "practically none" last year.
George Peabody, director of emerging technologies at Mercator Advisory Group, told CNNMoney that mobile payment is going to see a lot of activity in 2011 and that we're going to start seeing more and more people leaving their homes without their wallets.
On the other hand, Jane Cloninger, director at Edgar Dunn & Company, a consulting firm specializing in financial services and payments, doesn’t believe this shift is going to happen overnight. She told CNNMoney that she believes the mobile wallet will eventually replace the plastic card, but that it's going to take some time because consumer habits take a long time to change.
Still, according to CNNMoney, companies like Visa, MasterCard, Google, Bank of America, Citi and U.S. Bank are all testing contactless mobile payments, and many expect to roll out mobile wallets this year.
The senior vice president of online and mobile banking at Bank of America, Michael Upton, says, "2011 is going to be a very exciting, very dynamic year when it comes to mobile payments because it's the Wild West again, with all these players positioning in various different ways to redefine the digital payments landscape." Bank of American plans to release its own mobile wallet later this year.
Meanwhile, AT&T, T-Mobile and Verizon joined forces with Discover and Barclays in November to form Isis and provide a rival to Visa and MasterCard. The Isis mobile wallet will let consumers store multiple cards, make payments with the wave of their phone, check balances, receive coupons and use rewards points at the point of sale.
But it may stretch beyond just the money in your wallet. Abbott sees the potential to include your insurance cards, driver's licenses, and other information typically found in a wallet.
Just think of all the things you no longer have to wear or carry as long as you have your smart phone. You no longer need a watch, a GPS device, a computer, a camera, and eventually your wallet.
God help you if you ever forget to charge your cell phone or worse lose it. The other downside is identity theft. Hackers are notorious for breaking into data bases and stealing account numbers. Will this digital world be a safer place than your purse or hip pocket or will cyber thieves and internet pick-pockets be able to hack and download all that digital data? Or will thieves do what they usually do and take the path of least resistance, and simply steal or clone your smart phone?
A Nashville-based Kroll Fraud Solutions, a division of risk management company Kroll Incorporated recently released a list highlighting the top ten data security trends it expects for 2011 and guess what? One of them is that more and more organizations rely on portable devices such as mobile phones stolen devices will continue to be a major source of data breaches.