Are You Ready for the Paperless Wallet?

Tuesday, April 29, 2014

Near Field Communications is the technology that seems to be closest to gaining universal acceptance as the standard in mobile wallets. Using your phone to make everyday purchases everywhere with it may soon become a reality.

In regions of the world like Africa that lack traditional banking infrastructure, mobile wallets or payment systems are in far greater use than bank accounts. In economically developed countries, most people have their own bank accounts and don't actually need mobile wallets. The new technology does offer added convenience, though.

What is the convenience with a mobile wallet, really?

Payments at stores become much simpler: Paying at a store with a credit card or debit card, while easy, does require you to swipe the card and sign. With an NFC-enabled phone in your pocket, you simply need to tap the device on an NFC checkout terminal. You're also far less likely to be caught without your phone than without your credit card. With a mobile wallet, then, you're always ready for anything.

A phone allows you to carry a lot more than just money: With an NFC mobile wallet device, you can always carry your collection of store loyalty cards, rewards accounts and coupons wherever you go. You won't ever need to pay full retail just because you don't have the right discount information with you. Even the coupons that you do find on coupon sites like may get on the NFC game one day.

Not many retailers accept NFC at this point

According to NFC World, many UK stores are already enthusiastic about NFC. Not that many stores are online with the technology yet, though. Argos has NFC at 40 of its UK stores. HSBC, Santander, Nationwide and other banks are trying it at a few of their branches. Giraffe restaurants have it too. The vast majority of businesses, though, don't accept it yet. When the technology does go mainstream, though, it will probably catch on quickly.

What's the holdup?

One of the reasons why NFC has been slow to catch on is that there are many competing standards. Each country has its own large set of businesses offering NFC, each one trying to carve the market up for itself. These operators often use their own proprietary technologies and business standards, too. If you are signed up to one service, you NFC mobile payment won't be accepted at a store with another service.

Britain has 4 main NFC services - EE Tap Wallet, Orange and Barclaycard's Quick Tap, Vodafone SmartPass and Visa payWave. EE Tap Wallet only works on a few Samsung and Sony phones. Vodafone SmartPass works on any phone, but requires a special SIM card with NFC embedded. Then, there are other mobile wallet technologies that don't use NFC. The iPhone doesn't use NFC, for instance.

The mobile wallet market is messy. Once it organizes itself, though, it should offer consumers significant conveniences.

Russell Matthews is a tech guy. From elaborate entertainment systems to mobile technology, he enjoys writing about ideas and innovations that can impact everyday life. Follow Russell on Twitter.