Google and the last days of the credit card
The future is no longer in plastic.
Or such was the message from Eric Schmidt when he was talking at the Web 2.0 conference in San Francisco. Credit cards are about to become as obsolete as the Sony Walkman in the age of the iPod. Replacing them will be the smartphone – Android phones in particular.
Next week, Google will release a new version of its Android mobile operating system software, called Gingerbread. Gingerbread will support near-field communication, a technology that marries allows the smartphone to act like a credit card. The technology relies on a chip with a range of several inches that allows wireless payment transactions much more simply and, according to Schmidt, securely than a standard credit card.
The thing with near-field communication is, the whole notion of location takes on a new meaning. Now I can just tap I don’t have to take a picture I don’t have to scan a barcode… We think the overall mobile market which is already exited about these payment systems, will benefit from having this because it’s a secure element that is very hard to steal. And the theory is you can take these mobile devices and walk into a store and it will be able to figure out where you are with your permission. Effectively to bump for everything. And eventually it will replace your credit cards.
Schmidt said the payment processors like Visa and Mastercard are pushing for near-field communication devices believe they believe they will lead to fewer losses related to credit-card fraud. He also sees it launching potentially hundreds of new startups in mobile payments as new payment platforms emerge.
Sounds pretty good in theory, but recall how long it took a significant number of people to trust typing their credit card numbers in Amazon’s site 15 years ago. Just because the technology is safe doesn’t mean consumers will overcome their squeamishness for new payment technologies. Not to mention the notion of your phone sending personal information into every store you enter. With your permission, of course.