Don't pay by cash or check: Use your cell phone instead

Are you ready to give up cash and checks and start using your credit card exclusively? You might just be able to do that -- if you own a smartphone.

Seems that now that almost everyone with a cell phone is quickly exchanging it for a smartphone, several companies are betting good money that these phones will be used for almost everything -- including paying for your morning cup of joe or the drinks at that cash-only bar after work. According to The New York Times, cash as payment has declined as debit and credit card use has risen. And now, mobile-payment technologies from PayPal, Intuit, VeriFone and Square are making it even easier and more affordable for anyone from your housecleaner to the farmer you buy heirloom tomatoes from to start taking credit card payments.

Love it or hate it, it seems that most companies are betting it will become part of the new financial landscape. Google recently acquired Corduro, a company that offers online and mobile payment technology, and Visa recently purchased CyberSource, to also expand its mobile technology endeavors. Mobile commerce is definitely expanding, with much of the enthusiasm coming from teens and young adults who've already adopted the technology on Facebook or other social media.

So far, the U.S is lagging behind in mobile payments (developing countries like Kenya and the Ivory Coast have already embraced it), but companies are betting on young people expanding its use. The new technology is also looking to make taking credit card payments cheaper for retailers and drive people away from the more traditional credit card companies.

A while back, I wrote about PayPal's new partnership with the iPhone, that allows iPhone users to pay one another by using their cell number or by bumping phones together. At this point, that form of payment is still limited to iPhone users only and isn't recommended for retailers. For those who want to use a credit card, the new cell-phone-as-credit-card-processor can be created by inserting a small piece of hardware into a smartphone; anyone from a street performer to a shoeshine vendor can then swipe your credit card. This new kind of payment system is likely to become even more popular with smaller retailers because of the danger of bounced checks or fraud, the bane of small merchants everywhere.

With mobile payment technology still in its infant stage, consumers haven't yet committed to any one kind of technology. According to the San Jose Mercury News, other methods for consumers include an RFID sticker that sends a signal, a method currently being promoted by Bling Nation, a startup that has partnered with regional banks; MobiBucks, which uses a phone number and PIN to access one's account; and Obopay, where users can text message a payment or go online to transfer money. While dozens of startups are flooding the market, trying to hit on that perfect system to attract millions of users, so far, there are no frontrunners.
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