Cell Phone Credit Cards Appear in US

Already a mainstay of commerce in Japan and South Korea, cell phones that contain credit card information are gradually making their way into US markets. Pilot projects are underway in which cell phone users can pay for items by aiming their phones at a infrared data reader.

Ideally, cell phone credit cards would be a fast and convenient way to pay for purchases, particularly for small transactions. Mastercard, Visa and American Express have "contactless payment" initiatives underway. McDonald's and CVS are among the retailers experimenting with the systems. Most of the major cell phone manufacturers are developing models with IR ports and that can hold credit card data.

The product trials now underway are revealing problems with the technology, which the companies involved have vowed to fix. Among the most serious is the occasional difficulty in getting the readers to register signals coming from the phones, negating the convenience factor. Security, of course, is another critical element. Every point in a transaction must be fail-safe from a security standpoint, as the first major vulnerability or hack could permanently destroy confidence in the technology.

Even after all the bugs are worked out, don't worry about rushing out to buy a credit-card-enabled phone just yet. Even advocates of the technology concede that widespread adoption in the US is years away, simply because of the time needed for retailers to deploy the necessary reader and back-end equipment.

Source: New York Times