Days of the Credit Cards Numbered?

Days of the credit card are numbered, part 2. I have spouted off about this for some time now, but it seems that there is a lot of activity in the area of Near Field Communication capability to be placed in cell phones. In an article that ran in Business Week, it talks about Google’s efforts, which are well known. This is an article from November in PCWorld: http://www.pcworld.com/article/210861/what_googles_nfc_android_phones_will_mean_for_you.html

But what I did not know is that Apple is also working on something, although it is rumored in the above article. Bank of Apple? But first things first, in order to fight the fight, you have to have a solution and this is probably why Apple has been active. A solution is already available in some Samsung and Nokia phones. Particularly in the new Google Nexus S, which is why Eric Schmidt all fired up on the stuff. What does this mean? Expect this to happen sooner than later because, well, competition and deep pockets that’s why. The phone is the easy side of the equation, getting merchants to sign on could be a bit more difficult. Why do we care? I’m not really sure why we care to be honest, it is simply pretty cool that you can carry money in your phone. Your ID and other information. Husam told me about one of his friends that has a credit card machine that attaches to his iPhone for poker night. This will eliminate the need for that, just a phone “bump” will take care it. If you are on a cold streak in Vegas? Don’t fret, bounce your phone off of the reader, enter your pin and get some chips. The reality is that we should be aware of the opportunities that may present themselves surrounding this. I assume that any money that we might make would be from payment processing or in security software, then again I have no idea. By telling you, now you are responsible too, even though the likelihood that you read this is fairly low. By my estimation, without having done any real research, NFC chips are very simple, very low power and very low cost. There are a number of standards that already exist and there is one of these chips in your card key, or is it key card, I always forget. Secure payment is the obvious solution, but the technology will work well for any secure exchange of data at close range such as boarding passes, electronic keys, coupons in the aisle etc. The credit card interchange fees will be/are threatened. I believe that the issuing banks feel the bulk of the pain, but I’m not sure. For the credit card companies, they will lose their take eventually. Australia has proven this to be possible by forcing the interchange rates down (those communists). There cannot be much terminal value in those oil wells for the credit card companies. However, they will certainly fight hard to maintain share by getting their NFC payment systems up to speed and forcing vendors to offer their service. In the end, I think Visa and Mastercard should probably start making phones…