Once upon a time we traded goods and services without any money at all. After a while we started to use gold and jewelry to pay goods and services. Later on we started to make coins with the same value as the metal it was made from. When banks where introduced and we started to use paper money, the paper itself had no real value, everything was based on trust of the bank who printed the paper. Next step was the check. Now we had to trust both the bank and the people who gave us the check. Up to this point, we used to have control of our expenses. We either looked in our wallet or in the check notes. When the credit cards were introduced, we lost control of our balance. At least most of us never don’t keep notes of our expenses. In the end of the month we get some surprises that we forgot about! Next step was telephone and Internet banking. We can pay our bills and buy stuff from the Internet but still we need to have the credit cards and the money in our wallet. Now we are waiting for the next step, namely using the mobile as a mean for paying and identify ourselves.
The mobile will be your wallet!
It can hold your identity, it can be your credit card. The technique to use is NFC (Near Field Communication). You hold your mobile close to a reader and your bank account is withdrawn the right amount. BTW Now you can see your balance anytime you want. You have control again.
What technology needed for a Mobile Wallet
The technology used is very simple. That is not any problem at all.
- A mobile with NFC included. It is a chip that can send out a signal that reaches a few cm. Just hold the mobile near the reader in order to pay or identify yourself instead of using credit card or physical money.
- A reader that can identify the signal from the mobile and return a confirmation. The reader will make sure that the transaction is done and your abnk account is withdrawn.
- A bank system that can handle the stream of transactions online.
- A secure way to know that you are you and it is your mobile. That can be anything from pin code to identifying your finger prints. If you lose your mobile no one else should be able to get your money or your identity. It should be possible to get a new mobile and get started with a few actions.
All these things are easy to solve and also get an even more secure system than we have today.
In Japan this system has been around since 2004 when it started as a pilot test in the Tokyo area. Now it is a working system Which you can use to pay the ticket at the subway or as a credit card for the taxi or the flight.
The real challenge is standards and Infrastructure
I don’t want Nokia to build their own wallet system and Apple another. That would mean different systems in buses, shops, libraries and so on wherever it can be used. Standards and a common infrastructure is the answer. Banks, Operators, Mobile and in some cases governments must agree on the same system. This must be a social and political issue because we are talking about replacing coins and bills, still a standard payment method besides the credit card.
I hope that wee soon will see pilots similar to the Japanese five years ago. I am afraid that when it comes to reality the Europeans will not use the US or Japanese systems and US will not look at the European or Japanese systems. We will have different national systems and ten years later someone will start to ask “why don’t we have the same”? Well, that’s life, I have to live with it!
BTW, the mobile will have many other everyday functions in the future. For instance replacing our keys.
Identification, money, keys and much more:
Whatever you do, don’t lose your mobile!
Some Links:
