Nokia Adds Momentum to Wallet-Phone Concept

By Allan Pulga

Last issue we were talking about text-message barcode coupons, now we’re talking about scannable wallet phones? What will they think of next?

It might sound like science fiction, but the world’s largest handset manufacturer, Nokia, has recently joined Samsung, LG and other manufacturers and carriers on an initiative to turn cellphones into wireless wallets, reports Teresa von Fuchs of Wireless Week.

This new concept would have people using their phones as a payment method, by waving them over wireless readers or, in some cases, by punching PINs into the phones themselves. The wallet phone operates on contactless payment systems, which use “near field communications” technology to transmit the payment signal.

The device may end up doing much more than make payments. Some prototypes are able to hold coupons (See previous issue: Coupons ) and loyalty program points, and allow for bill payments and other forms of online banking. Other variations include transport or event tickets, and even pieces of identification. Further information, like remaining electronic cash balance, or transaction records can be read directly offline by the cellphone. In the end, the phone could act as both a wallet and a personal banking device.

Needless to say, such a device must overcome a slew of security issues and eventually prove to be a worthwhile investment for the companies involved in its development.

Among the carriers signed onto the project are Cingular/AT&T Wireless, China Mobile, Vodafone, Telefonica and a number of other major European and Asian carriers. MasterCard is also involved. Nokia, Samsung and LG plan to embed a wireless chip into their phones. Trials with the new standard technology are set to begin in October.

“After several fragmented initiatives, the mobile phone industry is now uniting around a single approach to enabling the mobile phone to be used, instead of cash or plastic credit card, at the point of sale,” said Rob Conway, CEO of the GSM Association, in a statement.

In Japan, more than 12.6 million consumers already have credit cards embedded in their phones, reports Fuchs.