Use Your Cell Phone as a Credit Card

Imagine waving your mobile phone at a filling pump to pay for gas or tapping it on some tiny gadget to buy a bag of doughnuts. That's the vision of Nokia and MasterCard International. The two companies have teamed to test technology that they hope will someday give mobile phones new wireless credit card capabilities.

In a market trial to begin later this month in Irving, Texas, Nokia will distribute phones with snap-on phone covers that have an embedded Radio Frequency ID chip, Nokia said Tuesday in a statement. The chip is programmed with pre-registered MasterCard payment account information, using the company's "PayPass" payment technology.

The technology being tested by Nokia and MasterCard allows consumers to use their mobile phones to pay for food, tickets, gas, and many other goods electronically without having to pull credit cards out of their wallets and run them through card readers, according to Nokia spokesperson Damian Stathonikos.

"The chip has what you could call a virtual magnetic strip that contains all the information typically contained in a credit card," he said.

Consumers, for instance, can tap or wave their Nokia phones equipped with the vendor's SmartCover technology on or at any specially equipped PayPass readers at point of sale, according to Nokia. The RFID chip then transmits payment account information to the terminal, which is connected to the MasterCard payment network. A system provided by JP Morgan Chase processes the payment account information. The entire process is designed to take only several seconds.

Several merchants in Irving are participating in the trial, including a bar, restaurant, filling station, and camera shop.

As part of the trial, the merchants can send ads to the SmartCover phones via SMS (Short Message Service), according to Nokia. Later in the trial, Nokia plans to upgrade the messaging function to include MMS (Multimedia Messaging Service), which delivers video and audio.