Are Smartphones Replacing The Plastic Credit Card
This blog post refers to the privacy, security, networks, and ubiquity of contactless credit card processing.
Through the grapevine, we all heard about using your smartphone to make credit card payments without even touching your plastic card. This practice has already been used in Japan, Turkey and the U.K, but has not widely hit the market in Australia and the USA.
The rumors are no longer a fad, now two of the largest telecom companies joined the two largest credit card companies in their quest for contactless credit card processing using your smartphone.
Ubiquitous computing is an intertwining of networks and the local user, which draws together new possibilities (Varnelis & Friedberg. 2008). It’s a growing development in technology that enables the user to conduct all its activities on one device – in this case a mobile phone.
My premise is that this will contribute to the demise of the home computer used as such. It is the mobile device that’s going to take over converging integrated customized user applications and will act as a customized content-delivery system. We are entering an era of ubiquity in the use of new media, mutually stressed by Flew (2008).
Smartphones have encroached on tasks ranging from Web browsing to street navigation; now with two of the largest credit card companies joining the landscape – Visa and MasterCard – ventured in contactless credit card processing in the USA. Research has predicted that more than half of U.S. consumers — and 80 percent of those 18 to 34 — will use mobile financial services within five years (The Week. 2010).
The Technology
The smartphone will be augmented with the addition of an RFID antenna (Radio Frequency Identification) and chip, and this will be embedded into the phone. RFIDs are a passive way of providing smartphone users with the capacity to tell their stories. These are small tags and commonly used in inventory tracking stores (Varnelis & Friedberg. 2008).
Provided that all goes well, cell phone RFID payments could be more secure than paying with plastic (Eaton. 2010). However, RFID technology is not free from any threats such as viruses, security and privacy (PC World. 2010). Hackers, those who access, reproduce and modify data on the devices expose design flaws in the system, which could potentially be a detrimental issue on security (Dyer-Witherford. 2002), and threaten the acceptance of this technology at the inception. In the past, RFIDs have been subject to privacy and security issues, and no bulletproof way of deactivating of RFIDs has been identified yet (Albert & McIntyre. 1998). Once a user makes a credit card purchase, it’s forever identifiable with the user, and tracing the user is also possible then (Varnelis & Friedberg. 2008).
What’s the impact of the technology and on existing cultures?
Foremost, it will prospectively change the landscape of mobile phone use, merchandising, and its eco system – communication networks/infrastructure, payment culture, banking systems, merchant systems, cell phone provider services, security, and proprietary rights issues.
Although these digital ubiquitous developments will take up time before it is fully implemented and widely accepted, I predict that it is going to mark the next era in our culture of how we conduct our business, communicate, obtain content, and process transactions in the future.
References:
Albert & McIntyre (1998). Spychips: How Major Corporations and Government Plan to Track Your Every Move With RFID. Nashville: Nelson Current
Eaton, K. (2010) Specter of Apple Looms Over Verizon, AT&T's Cell Phone Credit Cards Game (Internet). New York: Fast Company. Accessed on August 9, 2010. Viewed from fast company
Eichenbaum, P. & Collins, M. (2010), AT&T, Verizon to Target Visa, MasterCard With Smartphones (Internet). Accessed on Aug 2, 2010. Viewed from bloomberg
Varnelis, K & Friedberg, A. (2008) Networked Publics, MIT, Cambridge MA.
Other sources:
Accessed on August 9, 2010. Viewed from the week
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