It’s been 10 long years since I made one particular prediction that has not taken place: I predicted we would have an alternative payment system via cell phone that serves in lieu of cash or card.
Some Asian nations have long allowed people to use cell phones as a form of payment. Now it seems like this will finally come to the United States…albeit 10 years too late for my prediction. Apple is reportedly racing Google to put a cell phone payment system into the marketplace with the next iteration of its iPhones and iPads.
The technology in question here is called “Near-Field Communication,” and it can beam and receive information within 4 inches, according to Bloomberg. So you’d potentially just hold your phone up to a scanner and it would deduct the amount due for a purchase from your bank account.
I see this as a huge step forward for consumers. Here’s why: The banks have a chokehold on every form of payment except cash. Their dominance allows them to charge huge fees, to the detriment of individuals and small businesses, with what they siphon off from the system when you use plastic.
Taking it one step further, it would be great if wireless providers could essentially set up their own credit facilities. They already know what credit you’re good for and they bill you on a regular basis, right? So phones could work as a form of payment to cut banks out of the deal. Or maybe it will emerge that the banks end up cornering the market on this yet again. Either way, this could be very nice from a convenience standpoint.
If I let my imagination run wild, I could see cell payments being a form of international money. You might pay by cell rather than having to convert your money to foreign currency when you travel.
PREDICTION: So often, going on record with a prediction like this means egg on my face. But I believe before this year is out, you will see stirrings of people paying for purchases with their cell phones. Let’s see if I’m right this time.