Cell Phones As Wallets One Step Closer

The GSM Association called for most mainstream cell phones to have NFC technology, which paves the way for phones to be used as contactless payment devices.
You may soon be able to use your cell phone like a debit card, as the GSM Association called for mainstream cell phones to sport near-field communication (NFC) technology by mid-2009.

Shoppers in Japan have been utilizing the technology for years to buy items and manage bank accounts via cell phone, but the technology has been slow to catch on in other parts of the world. The GSMA says it can spur adoption by using the standard single wire protocol interface, which makes communication between NFC hardware and SIM cards possible.

With an NFC-equipped handset, a customer could link their phone to a bank or credit card account and then make purchases by swiping the handset near a specially designed terminal.

"As one of the first operators to trial mobile payments, we've seen firsthand, the willingness of consumers to adapt to this new payment channel which is very much dependent on the availability of NFC handsets and the associated ecosystem," said Kris Rinne, senior VP of architecture and planning for AT&T, in a statement. "We hope that the GSMA's delivery of a consolidated set of minimum requirements will accelerate the worldwide delivery of NFC-enabled handsets in the market."

Nokia recently released a cell phone that utilizes the NFC technology. The 6212 looks like a standard candy bar phone, but the 3G handset can be used as a mobile payment device.

While using cell phones as contactless forms of payment is one of the major draws of NFC, the technology can be used for a variety of other purposes. For example, business cards could be equipped with NFC so the information could be wirelessly transferred to the handset.

Both MasterCard and Visa have taken aggressive steps to expand their presence onto cell phones, and NFC plays into both companies' long-term strategies. Both companies have piloted mobile banking and payment programs, and Visa recently said it would develop applications that would allow contactless payment for phones running Google's Android operating system.