What’s next? A credit card in your cell phone
Posted
Jun 25 2009, 06:17 PM
by
Karen Datko
Rating:
See something you want to buy? Charge it with a wave of your ... cell phone.
That's the next big advance in credit card technology. Håkan Djuphammar, a vice president of Ericsson, predicted at a forum in Stockholm that all cell phones will come equipped with enabling technology within a year. For more on that, read this ZDNet report.
In the U.S., which lags behind in this development, banks and other companies are test-driving an RFID sticker that can be attached to your cell phone so you can use it to buy stuff, says Jeremy Simon of CreditCards.com in a guest post at Alpha Consumer.
Cell phones, employing something called near field communication or NFC technology, will be used to pay for purchases big and small, as well as unlock doors and grant you access to concerts and theaters -- and do much, much more.
We have to wonder, how secure is this?
But first, some background: Radio-frequency identification technology is not new to the credit card industry. Credit cards that you don't have to swipe have been around for several years. (Other everyday uses are ID chips in pets and tags embedded in passports.)
Consumer advocates have raised several concerns. The one that seems most valid is security. You can get a sleeve to prevent the tag in your credit card from being scanned by crooks, but how would you protect your cell phone?
Unlike standard RFID technology, NFC allows two-way communication between the phone and the checkout device and only if they're within an inch or so of each other -- a big security plus. "The device cannot be interrogated for its code or have any interaction unless the consumer chooses to interact with an RFID-enabled device," Bert Moore, editor of AIMGlobal, wrote in 2007. But what's to stop some geeky crook from eavesdropping up close and personal when the e-chat has begun? That's a legitimate concern.
Another safeguard is that you could be asked to provide a password or PIN to complete the transaction, according to HowStuffWorks.
Also, Djuphammar said the credit card company could monitor the location of your purchases and your calls. CreditCard.com blogger Tyler Metzger explained that "if purchases and phone calls begin showing up at separate places around town, a red flag could be raised and a fraud investigation starts." (Does that raise privacy issues, or are we already comfortable knowing that the location from which we make cell phone calls is not a secret?)
Finally, a 2007 article at InternetNews.com says that the three-digit security number -- the one that's on the back of credit cards -- would change every time you charged a purchase with your cell phone. If a crook was able to eavesdrop, that information would become useless.
But, you must be thinking, what if you lose your phone? The solution is that when you report it missing, the cell phone company would deactivate the phone and disable its shopping function.
These developments are happening quickly in other parts of the world. In the U.S., Jeremy says that U.S. Bank provided employees with RFID debit card stickers for their phones as part of a six-month trial. A Dairy Queen in Indiana is distributing tags that can be stuck to a cell phone, wallet or watch (or even your forehead, we suspect).
Jeremy says, "By keeping track of what specific customers buy over time, the tag can then provide individually tailored discounts and offers to each DQ customer."
It seems that the future of NFC goes way beyond tracking how many soft-serve cones you consume. For more information about its many applications, read this article at WirelessWeek.
Your thoughts?
Related reading:
New credit cards allow hands-free theft
Crossing the border is going to cost you
Coupons over cell phone get a test
