The global mind-set is all about making things smaller, faster and more efficient, and money is no exception. In the very beginning people bartered goods and services, which was then replaced by coins and notes This became the norm until credit cards, our ‘flexible friends’ were introduced, shrinking the size of our wallets. Now we stand on the edge of another minimisation of currency that looks to get rid of credit cards and money altogether – the smartphone wallet.
One of the biggest players in the smartphone wallet race is, unsurprisingly, Google. Android-enabled phones like the Samsung Galaxy S3 and Sony Xperia T have a Near Field Communication (NFC) chip built-in that allows it to communicate with compatible contactless tills. Google Wallet uses this technology to create an embedded credit card in your phone. Store your card details into the app and all you need to do to pay for your lunch or bus fare is to wave your phone over the receiver. There are also plans for Google to launch a physical Google Wallet Card to tide consumers over until all tills use NFC technology, though both the card and the app are only available in the US at the moment.
As useful as the technology is, payment using NFC isn’t quite there yet, and some believe that it could take as much as ten years before the majority of stores are able to accommodate it. In addition to that, NFC only accepts smaller payments, and there are no security features to stop unauthorised access. For security conscious Brits, an alternative to Google Wallet is PayPal InStore, which has been taken up by the likes of Oasis, Karen Millen, Warehouse and Coast. The InStore app is linked to your PayPal account and is protected by a PIN, which generates a barcode that can be scanned at the till to deduct the money from your account. A more secure method, yes, but with a very limited selection of stores it’ll only appeal to a few.
The QR revolution
QR codes are a bit of a mixed bag. They’re a great idea, but no one seems to really know what to do with them. One of the best initiatives by far is the virtual store that was first launched in South Korea by Tesco. Customers are presented with a digital display showing a variety of supermarket items, each with its own QR code. You scan the QR code for what you want, use the Tesco app to complete your purchase and the groceries will be delivered to your doorstep. After the initial success in South Korea, trials have started in Gatwick airport (Tesco) and Birmingham bullring (Ocado), though the QR codes have been swapped for more traditional barcodes.
Apple steps into the ring
Not wanting to be outdone by Google, Apple have also developed a digital wallet in the form of PassBook. Apple’s sights aren’t focused on money, however, but on all the other stuff that accumulates in your wallet; store cards, coupons and tickets. It’s pretty useful if you’ve earned enough points for a free skinny latte, but it’s no replacement for cash or credit card. Passbook rolled in as part of iOS6, but stores so far have been slow to adopt the service.
The capability for us to completely do away with our wallets, cash and credit cards is in its infancy, and while there certainly are many ways we can make purchases without physical money, we’ve still a long way to go before smartphone wallet technology is universally adopted.
This smartphone wallet article was written by Jamie Gibbs, who blogs for credit card comparison site Confused.com.