US Bank is the latest institution to offer credit card holders the opportunity to use their wireless phones as a way to make credit card purchases. The services are geared toward Android and iPhone users and is done through a partnership with Visa and DeviceFidelity for the pilot programs.
The program uses the In2Pay platform. Other major credit card providers have implemented wireless cell phone payment capabilities and it seems the technology is here to stay.
How Is It Possible?
Cell phones now have the ability to be used as a credit card thanks to chip technology that can be inserted into an Android phone’s MicroSD slot. For iPhone users, those interested in using their phone for plastic can order a case with a chip embedded. A signal is sent from the chip which is much like the chip in a regular Visa PayWave credit card.
US Bank customers can use their cellular devise to authorize purchase transactions directly to their Visa credit card account. Not all merchants participate in accepting payments this way but there are already thousands that do including gas station, terminals for mass transit in major US locations, and other retail stores.
Customers who are using the smartphone technology for its convenience are also most likely those that are technology minded. In addition to the ease of use for its customers, US Bank is also counting on the move to help upgrade its customer service approach.
What It Means For Consumers
Of course the most obvious thought concerning the new technology is how easy it makes paying for merchandise for existing card holders. You never have to search in your wallet again for your credit card. However, it’s interesting to see what would happen if a cell phone is stolen. Fraudulent credit card usage is on the rise as it is and all it takes is a few careful observations by a potential criminal in a checkout line to know you have the capability of using your phone for payments.
The other consideration to make is since paying with credit cards already makes it easy to overspend and extend credit limits, what will happen once credit card issuers make it even easier? Will consumers be more tempted than ever to make impulse buys with cell phones in hand?
It stands to reason that of the millions of wireless phone users in the nation many will most likely be tempted to turn their phones into a payment devise either for fun or for the convenience of the new technology. As there are already consumer debt issues that rum rampant across America, what happens when it’s all made that much easier?
Additionally, it will be interesting to note how many people without credit cards will sign up for an account thanks to the new technologies? Some people have the ‘gotta have it’ mentality that can lead to credit problems and debt issues they never had before. Obviously it will always come down to the fact that credit cards do not use themselves and account holders ultimately have the responsibility for smart spending on their smartphones.