Should Your Phone Be Your Cash Card?

If you occasionally can't find your wallet, often don't carry a checkbook, but always have your phone handy, you might like to pay your bill at a local store by bumping your phone against a digital receiver.

In coming months, Near Field Communication receivers will appear next to the cash registers of many brick-and-mortar stores. NFC is a way to transfer information wirelessly between two nearby antennas. Google has equipped its Sprint Nexus S 4G with an NFC antenna and offers the much-anticipated Google Wallet app to encourage shoppers to make phone-based payments. RIM is adding NFC antennas to many of its new phones, and is introducing a feature called "Tag" that will let BlackBerry users transfer not just payment information, but any kind of data over NFC.

Safer Than a Credit Card?

But will NFC make buying things even more convenient? One advantage of touchless pay is that you don't have to give your credit card to a vendor and risk having it mislaid during a particularly busy time at the register. And theoretically, paying with your phone is safer than owning a credit card, because cards are easy to lose and have your account number displayed on the front. When you lose a card, the bank must assign you a completely new account number and credit card. If you lose your NFC-equipped phone, you can wipe your credit information remotely and apply your account details to a new phone.

On the other hand, rushing out to buy an NFC-enabled phone makes sense only if you often shop at major retailers and chain stores like Macy's, 7-11, and Peet's Coffee. Some local retailers in big cities accept NFC payments; but even at stores that support NFC payments, you may need a backup card now and then. In my real-world, hands-on tests for PCWorld, the NFC receivers in a high proportion of stores were broken or malfunctioned. And though Google Wallet can show you when and where you made a purchase, it can't register what you purchased, so you'll still have to keep your receipts.

Of course, these problems aren't insurmountable, and you can bet that developers and phone manufacturers will be working on them in the coming months.

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