SiliconValley.com (via AP) has an article on how “major credit card companies and several banks have been working for a year to enable South Koreans to pay for everything from groceries to gasoline by cell phone.”
“We are conditioned to think that a credit card is a plastic rectangle,” said Cho Eun-sang, a senior manager at Harex Infotech, among the first companies to develop the technology. “But it is actually the data on the strip at the back, and data can be stored anywhere.”
Instead of handing over credit or debit cards that get swiped, users type their passcode on the phone keypad, point the device at a special receiver on a checkout counter and press a key. It’s as simple as operating a TV remote.
The phone shoots the card data in an infrared beam or radio waves. No signature is necessary. For small payments at vending machines, the passcode isn’t even required.
Transmissions are encrypted and secure, and subscribers who lose their phones can get them disabled within seconds by informing the credit-card company.
Lee Jong-hyun, an assistant manager at SK Telecom’s mobile-finance division, envisions cell phones that also contain club memberships, a driver’s license, ID card, airline frequent flier card – essentially everything people carry in their wallets.
“In the future you only will have to carry one handset,” Lee said. “It will be your window to the world.”