Make Purchases Using Mobile Phones

Dennis Faas's picture

These days, it seems as if cash payments are settled using every medium but cash itself. Gone are the days of fumbling around in a purse or wallet to find the exact change needed to make a purchase. While cash is always an accepted tender, many now prefer to use debit or credit cards to alleviate wasted time and hassle.

Several major banks and mobile operators all over Europe have come together to ensure that one more method of payment will be offered to consumers in the near future. The group assembled to talk about the possibility of enabling future cell phone models to act as a wireless mode of payment.

The proposed technology needed to convert these phones into charge cards is called 'near-field communication' and sends encoded payments wirelessly between personal bank accounts and retail stores.

Near-field technology has already been tested in Japan, where over 40 million mobile phones are now being used to pay for select goods and services. (Source:

Introducing these phones into major European markets is proving to be an entirely different story. This is why several major banks and mobile operators have come together: to settle difficulties and draft a set of standards for using near-field technology.

The first problem is finding a way to finance these new networks. The proposed settlement would see near-field technology offered as a free service for consumers in European countries where credit and debit cards are already free to use. The service will be offered for an additional fee in European countries where credit and debit cards require an annual fee.

As expected, this ruling has been met with harsh criticism for its lack of unified continental equality.

Another foreseeable problem is developing a fair method of sharing the costs and profits of the new system between banks and mobile operators. Further difficulties include operation in low-battery power mode and transfer payment fluidity when consumers exchange their phones. (Source:

If negotiations are successful, however, mobile payment services will be offered to consumers in Europe within two years.

Many speculate that the first country to use mobile phones as an accepted tender will be France, which has been conducting several trial runs in the past few months. The response from consumers has been overwhelmingly positive.

We're sure retailers must be pretty pleased, too.

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