The mobile wallet

This may be an unusual way to start an article, but put your hands in your pockets and pull out the contents. What do you have?  Some loose change, your house keys, a wallet or purse, probably a mobile phone or some sort of handheld device. If you live in London you’re very likely to have the small plastic card that is the Oyster: the smartcard which makes buying and using transport tickets easier.

That’s quite a lot to be carrying around, a fact acknowledged by mobile phone manufacturers who are looking to lighten the load by embedding the Oyster swipe card used by London commuters into a mobile phone, with a trial set to start at the beginning of next year.

This is part of a wider strategy from phone manufacturers to move away from only pushing entertainment functions onto phones (think music, ring tones, games and some video content) to offering more practical functionality on their devices. In this case, transport, but also banking. The Economist recently announced ‘The death of cash’ and there have been calls to abandon coppers in both the US and the UK as detractors say the coin is obsolete and costs more to make than it's worth.

To this end the Oyster money scheme has already included credit card functionality that facilitates small purchases in around 1,000 shops and cafes - mainly in the City of London and at Canary Wharf. In these shops customers can use their phones to make payments of up to £10. On top of this a number of high street banks are allowing customers to check bank balances and top up mobile phone accounts on their handsets.

M-commerce, as it is known, has not been as rapidly adopted in the UK as in the Far East where there is a very mature market, or even in Africa where mobile banking is revolutionising transactions and the transference of cash in the shape of small loans and payments. This is helping to promote growth on a continent where infrastructure provides a number of barriers to the flow of resources and money. 

So then, from lugging around a ramshackle collection of coins and cards in your pocket, the perfect converged handset could consolidate all your consumer needs into one place. UK citizens are slowly growing accustomed to cash less payment; witness the dominance of chip-and-PIN, and swipe as methods of payment. One device for all your transport, banking and communication needs. What’s not to like?

Although there are security implications associated with losing your single device, just like when you lose your handbag, as is technologies wont, this potential problem will only provoke a solution. Disposable or destroyable data cards can’t be far away as well as more sophisticated ways of locking or tracking lost devices.  Handset manufacturers are realising that entertainment systems aren’t the only additional features people are interested in using on their phones. By integrating these very practical functions on to a phone, they will also attract a different market share. Where will convergence take us next?