Motorola Announces Cell Phone as Credit Card—Again

By Carmen Nobel  |  Posted 2006-02-08 Print this article Print

NFC technology allows for instant purchases with the wave of a hand, but e-wallets may be a tough sell to consumers.

Motorola on Feb. 8 announced plans for a system that will let consumers use their cell phones as credit cards, buying goods simply by holding their phones up to a scanner in a store. M-Wallet consists of two components: One, a software application that consumers can download to their phones; and two, the Wallet Service Center, with which the wireless carrier can manage the M-Wallet accounts. The M-Wallet is designed both for banking and shopping, officials said.
M-Wallet users wishing to send money to other countries could do this by phone and "not have to stand in line at Western Union," said Navin Mehta, vice president of applications management at Motorola, in Schaumberg, Ill.
The software is network-agnostic and compatible with any device that supports the Symbian operating system, the Palm OS, the PocketPC OS, J2ME, Brew or SimTk, officials said. Carriers have yet to commit to the service, but Mehta said he expects a carrier launch announcement in the next few months. "Were in advanced stages with a number of carriers," he said. "We expect to start trials quickly." Motorola and Intel join forces over WiMax. Click here to read more. While the software is available now, the chip necessary for instant scanning is not readily available yet. Initially the service will require customers to navigate a single portal to conduct transactions such as fund transfers and online shopping. Within six to nine months, M-Wallet will support NFC (near-field communications), the specification that allows for a transaction to occur when a phone is held to a scanner. This will require the phone to have an NFC chip and that the scanner support the technology as well, meaning retail stores will have to upgrade their scanners in order to support the chip. The concept of an electronic wallet in a phone is not a new one, least of all to Motorola. In February 2000, at the GSM World Congress in Cannes France, Motorola and Trintech announced what the companies said was the first secure virtual credit card solution for making purchases from mobile phones. Nokia has offered wallet capabilities in some of its handsets since 2003. On the service side, Japanese carrier NTT DoCoMo launched its "Felicia" electronic wallet service in 2004, allowing for banking and retail transactions using phones equipped with smartcards from Sony. But as with most wireless technologies, electronic wallet applications have taken off overseas faster than they have in the United States. Read more here about another Motorola move, the iTunes phone. There have been U.S. trials in individual retail outlets. In December 2005, several companies—including Cingular Wireless, Nokia, Visa and Philips—announced an NFC trial in Atlantas Philips Arena. Sports fans who have Cingular service, a Visa account, and a Nokia 3220 phone equipped with Philips NFC chip can buy food, t-shirts and tickets with the flash of a phone. Market analyst firm ABI Research, of Oyster Bay, N.Y., predicted that more than half of mobile handsets will be equipped with NFC chips by 2010. But some analysts expect the technology to be a tough sell to American customers, in spite of Motorolas assertion that the M-Wallet application uses trusted methods of encryption and authentication. "You have to trust someone new," said Nick Jones, an analyst at Gartner, a technology consultancy based in Stamford, Conn. "You have to trust the handset vendor or the mobile operator as well as your credit card provider. Most people dont trust operators a great deal." Check out eWEEK.coms for the latest news, reviews and analysis on mobile and wireless computing.

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