Tech Beat: Cell phone could replace wallet
Bumping a cell phone is being tested by many companies as a new way to pay for items or to transfer money. Technology reporter Adam Balkin filed the following report.
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PayPal has recently launched an app for iPhones, iPads and Android phones that allows users to pay for items and even split bills with a knock of the cell phone.
"Log in to your PayPal account, enter the amount of money you want to send, bump phones together. Our phones will connect, it'll recognize your PayPal account, hit 'approve,' and the money gets sent immediately," said Sam Shrauger of PayPal. "Our future is looking like a digital and mobile future or a web-based future. And any payment, whatever it may be, whether from me to you and you're on the other side of the world, or if it's a purchase, I want to make with my mobile phone. Any of those things we want to enable with PayPal."
PayPal is far from the only company looking into how to complete financial transactions in ways other than handing over cash or swiping a card. Major credit card companies and gas stations have been using contactless keychain-type devices for years.
Others, like Citibank, trying to integrate that type of contactless payment into a phone either via a sticker or an embedded chip.
AT&T and Verizon are reportedly working on their own mobile phone payment system that will start testing as early as next month.
Experts say there may be some hurdles that consumers will have to clear in terms of comfort, and some may even initially fear sending money through mobile phones?
"I think it's something consumers are still a little bit nervous about. They're just not sure how much information it's safe to keep on their phones," said Kelli Grant of SmartMoney.com. "But it's certainly something that people are becoming more interested in. We're getting pretty much used to doing everything on our phones, thanks to the growing app market."
Apps like those made by PayPal require a login for every purchase as part of security. For those other contactless payment solutions, however, users who lose their phones will likely have to notify the credit company as soon as possible, in order to stop unauthorized purchases.