Leave the Leather: Your Phone Is a Digital Wallet

Inplace #2

nfc_smallADOTAS – Statistics show that people are 10 times more likely to head home to retrieve a forgotten cell phone than a forgotten wallet. Cell phones are a personal and irreplaceable part of daily life. You can always borrow a few bucks to get through lunch, but for many of us, missing a day’s worth of calls or texts is just not an option.

So it’s easy to see that once technology, security, and behavior patterns kick in, the merger of the two is inevitable. In December, the trend for digital wallets was one of our top five predictions for disruption of the marketplace in 2011, and they are indeed off to a great start.

Although digital wallets have been well adopted in many parts of Europe and Asia, there’s a mad scramble to stake a claim in the U.S. with several format standards vying for prime positions. As such, there are a number of alternative digital payment technologies offered by banks, wireless carriers and merchant initiatives.

Boku is capitalizing on the fact that only 2 billion people have credit cards, but 5 billion have mobile phones. BilltoMobile is currently allowing Boku to access its connection to Verizon Wireless customers through BilltoMobile’s Direct Mobile Billing technology, which allows you to buy online with your mobile phone number. The charge simply shows up on your phone bill. Merchants and 2 billion consumers can transact across 230 different carriers.

Isis adds even more convenience to its solution by offering to eliminate the need to carry credit, debit, or reward cards, as well as tickets, coupons, or transit passes. The company is a joint venture between AT&T, Verizon and T-Mobile, who together will offer more than 200 million consumers access to the Isis service. They plan to offer a mobile commerce platform that uses near-field communication (NFC) technology to pick up a signal from your smartphone and charge or reward your accounts.

The Sprint Mobile Wallet was the first mobile payment solution from the US wireless carrier. It allows customers to use a PIN to make purchases using different types of credit card accounts or even their Amazon.com payment account via their phone. There’s no need to enter credit card information with every purchase; you just select Sprint Mobile Wallet at checkout, enter your PIN and choose your payment method or account from those saved in the Sprint Mobile Wallet.

eBay and PayPal have been in on the mobile commerce action for some time now with eBay’s mobile application. eBay’s most recent earnings report indicates that mobile transactions accounted for about 2% of its $53 billion in transactions, which isn’t small change. The company has recently purchased and integrated RedLaser technology into its free mobile app, which lets you scan a bar code on a physical item and compare prices with the same item on eBay. eBay is now incorporating Milo.com into its offering to provide search results for products in stock at local retailers, rounding out the total shopping experience.

Starbucks has made a big splash lately with its mobile payment system, which takes the approach of a mobile application that can be downloaded to either a BlackBerry or an iPhone. It is used a bit like a prepaid gift card or, as Starbucks calls it, a “stored value card.” You can “top up” your account using PayPal. The mobile application displays a bar code that can be scanned at the point of purchase in both Starbucks and Target retail stores and will subtract from the prepaid account.

Mobile commerce innovation will increase the importance and relevance of the mobile device and further integrate it as lifestyle item. Consumers’ association of commerce with their devices will increase the acceptance of mobile advertising and drive up the use of mobile search, increasing opportunities to effectively market to them.

Of course, once your phone is your wallet, you might still need some help remembering to bring it with you. But don’t worry: there’s a simple Bluetooth accessory to help you with that! It’s called Bringrr and you leave it in your car’s cigarette lighter. It tells you if you drive off without your cell phone. Are digital driver’s licenses next?