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Cell phone!!
Yes, the cell-phone is the new wallet.
Really! Well, I was just as surprised as you were to learn that sometime in 2009, Master Card and Nokia shared interest in forming a synergy between the two giants to devise a system where purchases, regardless of size, are charged to your cell-phone, and the bill shows up on your monthly telephone billing account.
This certainly sounded like a good business idea for the two companies, and a convenient way for customers to shop with a centralized payment processing. It was said that customers in other parts of the world did not use credit cards as much as individuals in the United States, and it was then predicted that this would be a perfect way to capitalize on those markets.
This is a relatively new phenomenon in the use of cell-phones in today’s business world, and it would be interesting to learn and examine what some of the other companies within the credit card and wireless telephone industries have done with this idea.
This article is mindboggling, and gives one a chance to peer into the future of wireless technology. Through the use of Man’s creative genius, what was mere science fiction a few years ago is now affordable for mass markets around the globe and across income levels.
The Mobile Wallet is improving the human condition, and has sparked a sustained cycle of investment, innovation and job growth, as well as lower prices and increased functionality for consumers. Sophisticated devices and more complex mobile applications are the ‘order of the day’.
The development of cell-phones could be traced back to 1832, when Samuel Morse created the telegraph. However, after decades of fine-tuning the initial discovery, Martin Cooper (said to be the father of cell-phones) created the first 30-ounce device to make a call, which sent shockwaves through the streets of New York City in l973. It was truly groundbreaking!
Below are the details of the first cell-phone (1973): A Motorola Dyna-Tac
Size: 9x5x1.75 inches
Weight: 2.5 pounds
Display: None
Number of circuit boards: 30
Talk time: 35 minutes
Recharge time: 10 hours
Features: Talk, listen, dial
According to the Federal Communication Commission, “in spite of the unbelievable demand, it took cellular phone services 37 years to become commercially accessible in the U.S.” Today, says the Cellular Telecommunications Industry Association, there are more than 60 million customers with cellular phones, although wireless service was invented 50 years ago. This cellular business, which was a mere $3M market 25 years ago, has today grown increasingly close to a $30 billion-per-year industry.
This article would not be complete if I did not make mention of the Smart Phones, the cell-phone of today. Although there is wide disagreement regarding when the first SmartPhone was produced, sources say that it was not developed until l992 by IBM.
Before then, the cell-phone was a device that provided individuals with a communication channel, irrespective of where they were. It was very convenient, and over the years became more attractive and popular. With this new-found popularity came the quest for a device that did more than provide voice communications.
As a result, the SmartPhone now provides digital voice service as well as any combination of e-mail, text messaging pager, Web access, voice recognition, and camera.
I daresay the methods used to conduct financial transactions prior to the development of the Mobile Wallet will, if not already gone, soon go out the window. They are the gas card (for purchases honoured only at the gas/service stations), easy pass (which allows you to conveniently and quickly navigate your way through the toll booths on the highways), money transfer services (eg. Western Union) and, of course, there is the old fashioned (seems that way now) way of paying cash or writing cheques.
Gone are the days when individuals needed to sit at their computers to complete financial transactions. With the advent of SmartPhones and 3G or third generation networks, defined as “A speedy network with a strong signal,” comes faster-loading Web pages, quick e-mail delivery, and smoother video streams on- the-go. It is clear that those days are now behind us as we look forward to the widespread rollout of the 4G network.
It is interesting to note that the term ‘mobile wallet’ was first introduced in 2003, and has since gained recognition and attention from the likes of other industry giants like LG, Samsung, and Sony. Mobile wallets have long been used in Japan; and, in a press release, a company official was quoted as saying:
“Mobile phones are becoming an indispensable part of consumers’ increasingly mobile lives, with a majority seeking to use them for more than just telecommunications.”
It was predicted at the time that more than 600 million ‘mobile wallets’ were expected to be in use by 2011, and that that number was expected to rise to 1.4 billion by 2015.
The MC website offers the following as part of their mobile wallet programme today:
• Tap and Go: Where customers, with a tap of their card, key fob or cell phones make a payment at supermarkets or merchants. Master Card customers all across the world are using this method to pay for ordinary mundane purchases like movie tickets, dinners, to name a few.
• PassPay TM was introduced in 2004, using radio frequency technology to securely transmit payment details wirelessly. This method is said to be ideal for retailers, since it is fast. It is used by more than 135,000 merchants and by nearly 44 million PassPayTM card holders. In its November 17, 2009 article, NFC news (nfcnews.com) reported yet another enhancement to the MC Pass Pay TM initiative, where Norway had agreed to allow its MC customers to pay for small purchases, using Cryptomathic for its Mobile-Over-The-Air Provisioning Service.
• Person-to-person payments (P-to-P): – prior to its invention, individuals had to find their way to the bank or money transfer agencies. With the help of MC and local banks around the world, customers can transfer funds right from their cell phones.
A SmartPhone user, in a personal interview, stated: “I do all my personal transactions (like paying bills and making purchases) and business (updating his website and staying in contact with his employees) on the cell-phone…” He also confessed that he doesn’t see his life as normal without his cell-phone.
According to an article published in 2009, Verizon and Sprint were preparing to launch their 4G network to improve the functions of the mobile wallet. I believe this innovation has already come on stream.
It is logical to conclude, therefore, that over the years, we as a society, a nation, a universe, have made massive strides in the way we use the advancement of technology to simplify our lives. We cannot deny the fact that we have come a long way in terms of our reliance on the cell-phone as a ‘mobile wallet’, and it is safe to say that the cell-phone will continue to play an important role in the lives of its users as they become more reliant on them.
I have observed that it is a virtual impossibility to find an individual without a cell-phone. I have also known a number of persons in the United States who have even given up their landlines to rely solely on their cell-phones.
The industry is striving; the Visa Card services and local banks have come on board, and are working together to provide customers with ‘mobile wallet’ functions and capabilities.
That the future of the cell-phone will always continue to play an integral part is evident in the changes in the term ‘business as usual’, and will create new and huge business opportunities for businesses in the wireless and credit card industries — an opportunity that has appealed to all and sundry.
From the widespread use of the cell-phone, it is also evident that it is much more than a communication device: It serves as a bank, a computer, and a business station, among others.
But here’s a word of caution to the wise: With our heavy reliance on technology, the need for cyber security becomes even more crucial than ever.
