Use Your Cell Phone Instead of Your Credit Card

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Ever wish you could pay for something with your cell phone? Chances are if your friends have kids, they'll whip out their cell phone to show you pictures. So why not put other staples of the wallet--such as driver's license, credit cards, and membership cards--on the cell?

Although we're a ways off from putting driver's license info on our handset, we can now link a credit card to our mobile, allowing us to pay for things like restaurant bills, parking meters, and cab fares using our phone. This is a promising concept, but the services are not yet nationwide, and the process needs fine-tuning, as I found in some recent hands-on trials.

For starters, I tested Watertown, Massachusetts-based MobileLime. It's one of the first mobile payment systems in the United States that lets you use any cell phone on any carrier to pay for goods and services. MobileLime works only at merchants that have partnered with it. For now, the service is limited to a few dozen vendors in the Boston area and one in upstate New York.

Tryout in Boston

Registering for MobileLime was straightforward: I went to the company's site, put in my phone and contact information, and then chose whether to link my phone number to my credit card or a prepaid account. Linking to a bank account is not yet an option, but MobileLime says that it will provide that service if customers ask for it.

I used MobileLime for lunch at Boston's Sunset Cantina. When I walked in, I called MobileLime's toll-free number using my Treo 600. The automated system asked me for the restaurant's location number, a unique identifier assigned by MobileLime. I asked the hostess for this code. She looked confused for a moment and then said, "Oh, you're using LimeWire [a file-sharing service]."

She asked the owner, who didn't know the number, either. Fortunately, Matthew, one of the servers knew the code. I punched it in, hung up, ate lunch, and at the end called in again with the amount and approved the tip MobileLime's automated system suggested. Matthew asked for the last four digits of my phone number and came back with a receipt.

I realized later that I could've called in only once--at the end of the transaction. When, for example, I went to Toscanini's, a Cambridge ice cream shop, I paid in just one call.

Carlsbad, California-based Black Lab Mobile is a service similar to MobileLime. It is beta-testing its payment system that retailers, such as theaters and restaurants, can use to let their customers pay by cell phone. Black Lab President and CEO James Linlor says the service should be available this fall. For now, you can only send money to another Black Lab user through your mobile phone--say, to cover your Friday-night poker losses.

To do that, you tie a credit-card-based account to your phone number and supply the recipient's phone number. Put in an amount, and your bet is paid off.

Cell Phone Meter Feeders

In Coral Gables, Florida, the city parking department contracted with Toronto's Mint Technologies for its PayMint parking-meter payment system. One of about 1500 users is Hank Klein, the 61-year-old vice chairman of Codina Realty Services, who says PayMint makes his life easier--no more scrounging for coins. If a meeting runs over, he simply calls in and extends his time.

If he forgets to call in and tell the service he's left his parking space, PayMint will send a text message to his phone to ask if he's still there. Klein wishes he could use PayMint for more than just parking meters. "I'd love to use my phone to pay for everything," he says. (In Las Vegas, Oklahoma City, and Yonkers, New York, another company--MPark--offers a service similar to PayMint.)

Paying for everything using your cell phone will be at least a couple of years off in the United States, estimates Mint Technologies president, Frank Maduri. The company is first testing credit cards embedded with radio frequency identification chips. The next logical step is to have cell phones with these RFIDs--which could make payments easier than MobileLime's process, as no calls would be required.

Phone manufacturers are developing RFID-enabled phones for monetary transactions and other uses such as gaming and networking. Nokia offers a version of its 3220 phone with a built-in RFID, and Motorola is testing several phones that use this technology. Still, the biggest demand for such phones is likely to come first in wireless phone hotbeds like Japan.

Wallet-Free Future?

Indeed, in Japan and in Finland people already buy goods via their phones. But even in those countries, a wide-ranging payment system is still an emerging idea. (By the way, don't confuse this process with the micropayments that let you buy such things as ringtones, games, and graphics to download to your phone.)

NTT DoCoMo, for example, Japan's largest wireless company, has been encouraging its users to pay for things with their cell phones. It even bought a stake in Sumitomo Bank and is using C-Sam's OneWallet software so it can more efficiently handle transactions.

Once all the players do figure out these procedures and technologies, payments by cell phone and the resulting wallet-free culture could be a big thing.

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