New mobile phones to replace credit cards

MOBILE phones could soon replace credit cards for shopping payments, following the launch of a range of hi-tech handsets.

South Korea’s three telecom giants, major credit card companies, and several banks have been testing technology, that will enable users to pay for everything from groceries to petrol with a mobile.

“We are conditioned to think that a credit card is a plastic rectangle,” said Cho Eun-sang, a senior manager at Harex Infotech, one of the first companies to develop the technology.

“But it is actually the data on the strip at the back, and data can be stored anywhere. Instead of handing over credit or debit cards for swiping, users type their passcode on the phone keypad, point the device at a special receiver on a checkout counter, and press a key,” he said.

“The phone sends the card data in an infrared beam, or radio waves. No signature is necessary. For small payments at vending machines, the passcode is not even required.

"Transmissions are encrypted and secure, and subscribers who lose their phones can get them disabled within seconds by informing the credit-card company.”

“Korea is far ahead in the use of such technology, and it probably leads the world, not just Asia,” said Daisuke Okabe, a mobile phone culture specialist at Yokohama National University in Japan, where phone payment schemes are being trialled.

Lee Jong-hyun, a manager at SK Telecom, believes mobile phones can hold everything people carry in their wallets including ID cards and drivers licences.

“In the future you only will have to carry one handset.

“It will be your window to the world,” Lee said.