Mobile Phones Ending the Credit Card Era?

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It wasn’t until very long ago that people scorned the use of plastic money and held onto their wallets and ‘ready’ cash with their life. And thus they lived with the fear of wallets being stolen or cash dropped. However, over the last decade or so the aam aadmi has begun relying heavily on credit and debit cards for monetary transactions thanks to rapid tech advancements, such that our world now circulates around plastic money.

The advent of plastic money combined with a flourishing gamut of e-retailers has found even middle class families practically dissing the idea of travelling in the 90’s favorite family car – the Maruti 800 – for a pleasant weekend shopping and dinner routine. All shopping for roti, kapda and makaan was and is getting done on the mobile phone. But oops hey! what came as a package deal with plastic money was the fear of smarter thieving – money getting stolen in transition and through duplication of cards. (You may like Passwords Beat a Retreat, the Heart is Here)

Mobile savior

Tackling this concern became the next big challenge for inventors and what better way to tackle it than using the one weapon that practically

everyone carries on them today – the mobile phone. Near Field Technology (NFC) married with the mobile phone has begun solving several problems for consumers. For one, apps such as Airtel’s Easy Money, Google Wallet and Apple Pay are allowing people to shun their physical wallets for a digital one.

We are now stepping into the next level of a digital future where the wallet, paper ticket and pocket are all going live on your smartphone. So welcome to the world of NFC – a contactless, Wi-Fi-lite style tech that could already be in your smartphone, and could soon be a regular feature of your everyday transactions.

So how does NFC work? In simplified terms, NFC is basically, identifying the user and all that the user is linked to – from banking accounts to travel details. It’s a short-range, low power, wireless link evolved from Radio-Frequency Identification (RFID) technology that can transfer small amounts of data between two devices that are held within a few centimeters distance from each other.

By tapping your phone on a contactless payment terminal in a metro station or maybe a convenience store, NFC identifies your account and your personal preferences, shopping habits and even your most frequently travelled route home and makes the transaction through an app.

Imagine, passive NFC ‘tags’ on posters, in stores and on metros, that could contain a web address, a concession coupon, a map or a train’s time table that passers-by could touch their phones on to receive – or to instantly pay for absolutely anything. A Blackberry patent dated September 23 – US 8831514 B2 – describes just this.

Let me give you a hypothetical situation for the same. I have a membership card from a leading fashion store, Lifestyle. In order to encourage customer loyalty, Lifestyle gifts customers who accrue over 10,000 points with apparel worth Rs. 2,500. But it is important that I carry my membership card during every purchase. Now, if Lifestyle accepts a digital wallet and if I have an NFC-enabled smartphone and the e- Wallet app, all I need to do is activate the app and voila… my purchase is done and the points are added to my e-kitty in a matter of seconds. No physical money exchanged and no worry of card swiping on either side of the payment counter. And when it’s time for the purchase gift, the phone will send that information to the store and I won’t be charged for that amount during my next shopping spree.


NFC could soon elbow out QR codes. Source:

SIMulate transactions

The SIM card on your mobile phone doubles up as a smart card and identifies your account on a network. This allows it to act as the Secure Element that can hold other apps such as payment cards (Check patent US 20140244513 A1 for interesting details).

Now you must be wondering how NFC is different from other contactless bankcards. Well, as I said earlier, it’s a new league of digitization that we are entering into where its time for plastic money to go obsolete. NFC practically wipes out plastics, but works very much on the pin and chip system. Most new Barclay cards, American Express, MasterCard PayPass and Visa Europe cards have NFC contactless tech in them: the early stages of a ‘digital wallet’ in your own wallet. NFC-enable SIMs can be used beyond regular shopping. If an NFC app identifies me, I can use my smartphone instead of a passport to streamline my travel; I will be able to board aircraft without a physical boarding pass that come with QR codes. Unlike QR codes, NFC codes on SIM cards can be used even when a device is switched off. This makes NFC passes far more secure than QR codes that can be easily duplicated, forwarded or altered.

Although NFC hasn’t turned into a mainstream technology yet, once it becomes a standard in modern consumer electronics, smartphones will replace them and function as a universal digital badge, which will be used for access control, data management, mobile payments and social interactions.

For now digital wallets might seem a bit neoteric, but the potential is huge. Once digital wallets integrate everything from your driver’s license to your train ticket, to your passport, you should finally be able to say goodbye to your physical wallet for good.

(Featured image source:

Sharon Elin Sunny
Sharon Elin Sunny

An interesting conversationalist, Sharon’s strong social streak finds her working towards uplifting the socially underprivileged when she isn’t helping grow iRunway’s IP services and blogging on new technologies.

1 Comment

  1. Interesting read, however, we need to consider a couple of aspects before we even attempt to get rid of our wallets:
    1) Battery/Power Consumption: The one issue I, and probably most of the smart phone users, face is that the battery drains super quickly. I would hate to find myself in a situation where I’m paying for a ride back home and my I find my phone discharged. The mobile manufacturing companies need to ramp up their research on improving battery lives that can support phones for more than few hours.
    2) Security: All eggs in the smart phone basket, even though convenient, might cause more frustration than ease when one loses his/her device. I lost my phone very recently and the next week was just hell synchronizing all the accounts, contacts, apps etc. In my opinion, before we attempt to make our smartphones our avatars in this digital world, we need to improve the technology behind tracking lost devices and ensuring a Fort Knox level security of the data present on the devices.

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