This is the beginning of the end for cash


Paying by cheque will officially be dead by 2018. Now credit cards could become defunct too. Nokia has placed contactless payment technology into its C7 handset, released last month. Until now the company hasn’t talked about the RFID chip in the phone.

It isn’t mentioned anywhere, not on the packaging and not in the marketing thus far. That is because the ’near field communication’ (NFC) chip inside has not been activated. Users will need to activate them when the software upgrade becomes available in 2011. So if the handset’s NFC can’t yet be used, why is it such a big story? Well, because the future has finally arrived.

Nokia is nearly ready to change our lives. So, by the way is Apple and Google, both of which are currently filing shedloads of contactless patents. Apple hired ’contactless whizz’ Benjamin Vigier in August and Google CEO Eric Shmidt told the Web 2.0 summit in San Francisco last Monday that the technology in every future smartphone “could replace your credit cards”.

Weirdly, at the time Schmidt was addressing the conference, I was sat in a coffee shop in Soho with Howard Furr-Barton, principal consultant for mobile at Paul Mason Consulting, a specialist in retail systems. Furr-Barton had showed me the chip inside the C7 and was explaining what this technology could make possible.

NFC will revolutionise marketing and payment. Soon there will be millions of people using their phones as credit cards. Brands and retailers are scrambling to get their shop tills and payment systems compatible. And some of the concepts they are discussing will make you draw breath. Barclaycard pioneered the use of NFC but there has been little traction so far. Few retailers I know of besides coffee shop chains Costa, Pret a Manger and Eat have enabled contactless payment, and then only for purchases worth less than £10 or £15. But think beyond straightforward payment. Think vouchers being sent direct to your niece’s phone within seconds when you realise you’ve forgotten her birthday. Think loyalty accounts and receipts for purchases. Think about ticketing systems. Think about never having to queue up again because of the speed of transaction.

If you’re a clothes retailer, think about never losing another customer who dumps a full basket because they can’t be bothered to wait in line. Think about all this twinned with location-based data and what that does to marketing. And what else? Hotels will be able to send ’keys’ to guests’ handsets to open their doors with. You’ll be able to open your own front door with it. In some far-flung future you will have no use for your wallet, your keys or even cash. NFC take-up could signal the beginning of the end for cash.