Future Of Payments Is Right On Your Phone

Soon, you might be able to pay for a bag of chips with your smartphone. While at the CTIA conference in New Orleans, I spoke with Zavida Mangaru, a vice president at MasterCard, about MasterCard's new PayPass Wallet and how it works with near field communication (NFC) technology.

First, Mangaru showed me the usefulness of using a digital wallet online, where you can choose from any of the credit cards you've added to your wallet to buy things, such as a plane ticket. American Airlines and Barnes & Noble are the program's first partners. You simply click on the site's PayPass button, enter a password to access your digital wallet and choose a card, and you're done.

In the real world, the PayPass digital wallet uses NFC technology to let you swipe your smartphone to pay for purchases. Nearly 20 smartphones come with an NFC-enabled chip. Soon, using your smartphone to pay for all sorts of common items might be a reality.

I got demos of how the PayPass Wallet works online, in a cab, and buying a Coke. See the video below.

The market for mobile payments remains fragmented: Visa and Google Wallet also are working on systems that will let you pay for things with your phone instead of your wallet. As more people use smartphones, turning the devices into a payment system makes a lot of sense. Of course, NFC readers will become commonplace only if the masses start using the technology.