More than two-thirds of tech insiders think mobile payments will outpace credit cards as soon as 2012, according to a poll by Pew Research. The survey asked more than 1,000 people about the future for making payments with smart phones.
New technology allows for payments by phone. Known as "Near Field Communications" technology, a cell phone can quickly communicate by wireless transmission the data required to process a payment. Sixty-five percent of people surveyed believe that near field communication will be in widespread use by 2010. To make a payment, mobile phone owners will simply extend their phone over a reader, which will automatically begin the payment process.
Currently, most payments are made by card. Credit and debit cards are uniquely identified by their number, the name on the account, and the expiration date. All this information is currently found in the card's magnetic strip, which communicates with a reader when the card is swiped. Phone payments would allow for consumers to make payments without moving a card through a reader.
New Payment Systems
Google is one of the most aggressive companies in moving payments to mobile phone. The company's Google Wallet product allows for users to upload their credit cards and other payment information to more easily process mobile payments. In the future, analysts suspect Google will push for new near field communications payment systems to allow Google Wallet users the opportunity to pay by card with their mobile phone.
Studies show that as many as 10 percent of people have made a payment by mobile device. Some credit card companies like American Express and MasterCard have already created their own digital networks for online and mobile payment. Rumors have circulated that Apple, the company behind the iPhone and iOS, will soon create its own mobile payment processing application.