Forget mobile payments. The future is the mobile wallet

There's no reason that almost everything in your wallet can't be handled by your smartphone

In some circles, the notion of a smartphone acting like a credit or debit card is fascinating, and you see story upon story about mobile payment-enabled smartphones and the potential rise of PayPal, the telcos, and such as the new payment processors. Who cares? Even if Visa and MasterCard were somehow to let go of that billion-dollar processing business, you're merely replacing one financial processor with another.

The fact that a smartphone could act as a card is an inconsequential change. You still have to carry a wallet, and as long as that's the case, a simple plastic card remains easier to use, given that the technology for reading them is universal and all the proposed mobile alternatives require new, often separate, readers and work only with certain vendors -- you'll still be carrying plastic for the other banks' and merchants' systems. As a friend recently said, payments can't get more mobile than they already are.

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Replacing credit and debit cards with something embedded in your smartphone is not worth the bother. But what if you could replace the entire wallet? That would be a worthwhile change. The pieces of technology to enable that are coming together.

Open your wallet, and what do you have in it? A driver's license or other government ID. Credit and debit cards. Cash. An insurance identification card or two. Probably some family photos. Perhaps a library card, a store loyalty card, a transit pass, and a company or building ID or access card. Maybe a few other membership cards.

Most of these cards are just information holders, storing an account number or membership number. Those are easily replaced with data on your smartphone, which could be presented when needed in any of several ways: as a facsimile of the physical card, as a bar code or QR code for scanning (such as already used by many airlines for electronic boarding passes), or as bits in an embedded NFC or RFID chip. One or more apps could easily handle these information cards' data.

I'd expect Google, Apple, Microsoft, and RIM to each offer such an app as part of the core app collection on their respective mobile OSes. What would be required is a common API for libraries, insurers, museums, and so on to provide their identification information to such an ID app and, such as in the case of building-entry cards, to receive confirmation for logging purposes.

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