New Technology: Pay Without Your Wallet
What if you could leave the house with everything you need - but no wallet? Between credit cards and loyalty cards, our wallets have suddenly become heavy burdens to bear. When the cell phone first came on the scene, the fashion police were fine with attaching it to your belt much like one of those fanny packs, but those days are over. Now, we keep our phones in our pockets or bags along with our wallets and that makes for some heavy lifting. (To learn more about credit cards and how they work, check out Understanding Credit Card Interest.)

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Like a knight in shining technology armor, here comes the power of mobile technology to rid us of this 21st century dilemma.

What Are My Options?
Presently, there are two technologies that allow us to rid ourselves of our wallets. The first is Google Wallet. If it works out the way Google is hoping that it will, your phone will store your credit cards, loyalty cards, boarding passes, pictures of your family and your shopping list. Using a little known technology called near field communication (NFC), all we'll have to do is get our phone out, enter a password, position our phone within four centimeters from the payment pad, push another button or two, and you're done.

What Is Near Field?
Let's clear that up right now. NFC operates at 13.56 Mhz and is able to exchange data at 424 Kbits/second. Now you understand, right? Techie humor aside, NFC is very similar to Wi-Fi but it operates at very short range. The extremely short range makes it a safe technology for your most important information because, in theory, unless a person wishing to steal your financial data can get within four centimeters of you.

How Safe Is It, Really?
The human spirit is such that if you put something attractive just out of reach, they will work tirelessly to reach it and unfortunately, criminals do the same thing. NFC has actually been around for quite a while, but a mainstream way to use it for the greater good has not. As a result, there are already ways to "hack" the technology. Researchers in Vienna were able to write an application to compromise the security of the NFC. What if a criminal, for example, were to pretend to bump in to you and your phones were within four inches of each other?

To be fair, though, we've carried wallets for a long time and those are exceedingly less safe. You don't need any special skills to steal a wallet (other than maybe a very fast hand), but you do need special skills to steal from a cell phone. (With Google Wallet and Card Case just starting up, Shopping online is still one of the most cost effective and convenient ways to shop. To help protect you when you shop online, check out 7 Tips For Shopping Online Safely This Holiday Season.)

Can I Get It Now?
No. Google says that Google Wallet won't be available until September of 2011 and even with that, unless you have the one Nokia phone that will work with it, you aren't going to get it in September. Google has also announced that it has partnered with Macy's, American Eagle, Guess, Bloomingdale's, RadioShack, The Container Store, Foot Locker, Subway and Walgreens. Although that's an impressive group of retailers, that probably isn't a fraction of places that make your wallet see the light of day during your daily life. If you're one of those people who always want the cutting edge, sometimes little known technology, you need Google Wallet!

Option #2- Card Case
The problem with Google Wallet is that it only works with one phone and the NFS technology is in its infancy and is not well understood, and when we don't understand something, we're slow to let it in to our daily lives. Our second option uses good ol' cell phone technology to pay. Using your smartphone and an app called Card Case from Square, you can pay without the use of NFS.

Let's say that you really need a cup of coffee. Before you enter the coffee shop, you set up a tab on your smartphone using your name. Then, you enter the coffee shop, order your cup of java and tell them to charge it to your tab. You then receive a text message saying that you paid your tab. No wallets, credit cards, and as long as your within a block of the store, you can make transactions.

Because this technology is new, it isn't available at many locations but this startup company believes that it will be very soon.

The Bottom Line
We've been carrying wallets all of our lives but it appears that change is on the way. Although Google Wallet and Card Case are still in their infancy, this technology has the ability to change the way we pay and some experts believe that having the ability to pay out of our bank account as easily as we use credit cards will help consumers avoid the massive debt that has plagued them over the past decade. (To help you manage the plastic in your wallet, read Take Control Of Your Credit Cards.)





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