Credit Cards and Mobile Phones

In an interesting news article from the UK Britons may be looking to their mobile phones in the future rather than their credit cards.  Apacs represents several payment services on mobile phones.  A great many of the UK individuals are already using mobile phones to make payments and money transfers, but this might just increase ten fold in the new future.

The faster payments system has just been launched at the beginning of June.  This allows transactions to be drawn from a Near Field Communication Technology or NFC.  The NFC is a short range wireless mobile phone.  It allows secure transactions on the mobile phones to occur.  Such transactions like cash transfers and bill pay will be available to consumers.  NFC is like Bluetooth technology, but easier to use and a shorter range.

At the moment Nokia, Visa, and MasterCard are using the NFC technology.  They believe that consumers will make purchases as well as lock and unlock their homes by using the NFC system.  So the future could very well hold the NFC mobile phone as the new credit card.

Many UK residents are already using credit cards for most of their transactions.  In fact in the last 12 months consumer retail spending is up 34 percent from 32 percent of the last year in which credit cards have been used for these purchases.

The mobile phone is designed to combat the fraud occurring so rampantly in the UK.  It is like the chip and pin system consumers keep hearing about, in which security is hard to crack and very expensive for most of the fraudsters at the moment.

The mobile phone payment system uses the internet rather than a card machine, which is why it could be a bit safer for the moment.  The NFC is also only going to keep information in the phone long enough to make the payments.  This makes the card more secure than regular internet or credit cards that store information that you must delete.  The NFC can keep stored information if the consumer wishes such as being able to unlock the home, but at least the payment information will be safe.

It seems a bit premature to say credit cards won’t be used in the future, but it could be said they will be used less.  With direct money transfer to companies a payment can be made easier and quicker than a credit card.  It will also be without the nominal fees of credit cards.

Whatever the future holds now is the concern with rising debt on the credit cards for those in the UK.  They are trying to get their debts down and start saving money again.  However, in the current market this could be an issue.  This and other issues make the mobile phone payments with MasterCard and Visa backing them look really good to the consumers learning about the new products.  Credit cards are taking out cheques, but will mobile technology take out credit cards?  Only time will tell.