Friday, May 27, 2011

Is it a phone or is it a credit card?

Google has announced that Android-based mobile phones will soon have the capability of replacing your credit card, if it's a Mastercard that is.

Through the addition of near-field communications (NFC) chips and some extra system software, these new phones will permit users to engage in "contactless payment" transactions in much the same way that the latest generation of prepaid and credit cards operate.

While it might seem that in this case, Android has the jump on Apple, rumours abound that there will soon be an NFC-capable version of the iPhone on the market -- effectively closing that gap.

This commentator wonders if this new trend towards using your cellphone as a wallet is simply another case of a solution in search of a problem.

Personally, I find it much easier to keep a small wallet on my person which contains my credit cards and a little cash -- than it would be to carry around an android or iPhone sized mobile all the time.

And then there's the thorny issue of what happens if/when your mobile (with built-in wallet) is stolen -- or the batteries go flat after an extended internet browsing session?

Mobile phones are already an attractive target for thieves and to effectively turn them into a bank vault filled with someone else's cash would surely make them even more of a prize for anyone with criminal intent.

However, from a security perspective, perhaps the upside is that, by their very nature, NFC transactions can only occur where the phone is present. This is significantly different to the case with a stolen credit card that allows fraudulent online purchases to be made from half a world away and provides the thief with a much greater amount of anonymity.

Unfortunately, even if/when your mobile also becomes your default NFC transaction device, you'll probably also have to carry around a wallet containing cash and more traditional credit cards. In that case, you'll be exposed to both kinds of fraud -- should you be unfortunate enough to have your pockets picked.

It strikes me that if the phone makers are going to build in NFC capabilities then they ought to also include some form of biometric authentication. Perhaps a thumbprint reader or iris scan. The technology exists and the scale of manufacture would surely make it quite affordable.

As for me -- well I'll wait a while.

Right now I would be reluctant to give up my tiny pocket-sized mobile that I can take anywhere without creating an unsightly bulge in my shirt or pants and besides, my plastic is working just fine and as they say "if it works, don't fix it".

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