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Is the traditional credit card on its way out?

26 February 2010 17:41:38

New technology means the traditional credit card could be replaced. image
New technology means the traditional credit card could be replaced.
The Mobile World Congress expo held in Barcelona earlier in February acted as a showcase for the latest mobile phone technology, with the likes of Samsung, Sagem and Sony Ericsson unveiling their next generation of handsets. Innovations included pedometer and GPS jogging tracking capability, a brand new operating system called Bada and a phone which comes with a built-in pico projector. While this is undoubtedly impressive, research suggests the biggest change set to hit the mobile phone market in the not-too-distant future will be the incorporation of credit card technology. Near Field Communication (NFC) technology will be available as soon as 2011, a new report predicts, potentially changing the way consumers use credit cards, loyalty cards, bus and train tickets, library cards and even door keys.

How close are we to the widespread adoption of NFC technology?

According to Sarah Clark, author of 'NFC: The Road to Commercial Deployment', NFC technology is likely to be trialled first in the UK, alongside France, the United Arab Emirates, Singapore, Taiwan and South Korea. However, only a limited number of providers will be allowed to use the tool, which means that mobile phone companies and banks are likely to battle for the right to offer the technology to their customers. "Decisions made in 2010 will be critical in determining which mobile network operators, which banks, which industry suppliers and which service providers become the leaders in the field," Ms Clark confirmed.

How will this impact on present credit card technology?

When NFC does arrive, it could ultimately spell the end for the credit card in its present form. Simply by touching their phone against a 'smart' poster or label containing an RFID chip, consumers will be able to make a transaction. It will even be possible to transfer money to a friend by bringing two phones together. "No more rummaging around for the right change, card, keys or paperwork and no more texting your location to your friends - with NFC everything can be handled by your mobile device," Ms Clark said.

Is NFC technology safe?

One of the biggest hurdles NFC technology will have to overcome in order to be a success is safety, with the government becoming increasingly concerned about the impact of the introduction of smarter phones on fraud. To this end, the Home Office and the Design Council ran a competition recently to encourage the development of innovations to tackle mobile phone crime. One of the prototypes, called TouchSafe, incorporates NFC technology and makes M-Commerce more secure by only allowing transactions to take place if the phone has first been touched with a small card carried around separately by the user. Meanwhile, another safety feature of NFC technology is that mobile wallet capabilities can be disabled if the phones are lost. When this is combined with the fact that people will have the option of using their phone to make purchases even when the battery is flat, it appears that the death knell has been sounded for the credit card as we know it.ADNFCR-2196-ID-19641108-ADNFCR ADNFCR-2196-ID-19464191-ADNFCR

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