SALT LAKE CITY -- The concept of turning a cellphone into a wallet is quickly gaining traction.

With Google revealing a new service dubbed Google Wallet, it appears as if wireless payments are entering the world of reality. All the major phone manufacturers are moving in this direction by implementing Near Field Communication, a technology for wirelessly delivering payment information.

Sending money through the air is not a new technology. Radio-frequency identification tags made their way into consumer cards several years ago by allowing for contactless payment. The card transmitted a signal with the information needed to process the transaction. Many cards made it into the market, but few vendors could support them.

Key to a wide-spread adoption by users will be a large-scale embrace of readers that can receive these wireless signals. Unfortunately, a shopper can not simply point a fancy new Google Wallet-enabled phone at an existing card terminal and have the credit card number magically float into its existing circuitry.

Any traditional card reader will need to be retrofitted or replaced in order to support wireless payments, which would be a costly endeavor. Retailers are going to be reluctant to make that transition. Given that there is no immediate business need to justify the expense in upgrading, it will likely be years before the progression is complete.

Related:

Google unveils smartphone pay service, PayPal sues

Google hopes to nudge consumers and merchants into a world where the smartphone has replaced the wallet as the container for credit cards, coupons and receipts.

One of the concerns with the RFID cards is that somebody could intercept the communication. It would be a perfect theft being entirely invisible, requiring no contact or interaction. The nefarious individual would become a digital pickpocket by using a special reader to grab the card information.

The same problem will be present in the Google Wallet technology, although to a lesser degree as the device only broadcasts on-demand. A well-placed inconspicuous device would be able to pick up on the transmission and send it to a criminal. Such a device could be crudely fashioned to the underside of the desk at a retailer and could go unnoticed for months. While the Google Wallet communication would be encrypted, experience has shown that encryption schemes can be easily cracked.

Another worry is the loss or theft of the phone and compromising any financial information it contains. This is a common malady that everyone experiences at some point. Even if the phone has a password, there is no guarantee that the protection cannot be circumvented. This would be especially alarming to those who still are not comfortable giving financial information to secure websites.

The hot-bed issue of privacy also appears in this debate. Several major privacy breaches involving large companies have renewed concerns over how information is tracked and used. A phone, unlike a magnetic card, would remember every purchase. This would be useful for helping the user monitor spending. On the other hand, it would paint a clear picture of purchasing habits for which an advertiser would be willing to pay a great deal. In a world where information is power, these devices would be golden.

Taking a fatalistic approach and ignoring all other concerns there seems to be little saved by adopting this technology. It is not solving any existing problems and as a result does not add value. Very few people have complaints about the usability of their credit and debit cards. One can whip out their wallet and slide their card through a card reader faster than they could grab their phone, wait for the screen saver to go away, type in their password, open the necessary application, make sure the settings were configured and then push the "send" button. The novelty factor would be great, but after a few uses, it would quickly wear off. Another major concern would arise if the phone crashed or froze or the battery died unexpectedly. How often does a credit card battery die and need to be replaced?

To really pique consumer interest Google Wallet would need to do a lot more. If Google could include one's drivers license and maybe even passport, more people would sit up and take note. To sell the consumer, technology giants are going to need create a device that can replace the entire wallet, not merely supplement it.

The concept of replacing one form of payment with another is not new. Bills were supposed to replace coins. Years later, the dollar coin was supposed to replace the bill in order to curb the hundreds of millions of dollars it costs taxpayers to reprint worn out bills.

Checks were supposed to replace currency.

Debit cards were supposed to replace all of those. With every iteration there is a level of adoption, and cellphone payments will be no different.

Will it eradicate everything else? Extraordinarily doubtful. Will it make life easier? Arguable.

Is it merely glorified kitsch? That is for the reader to decide.

Joseph Irvine is a self-employed computer engineer in Madison, Ala.. A graduate of Utah State University, he hopes to pursue a degree in law at BYU in the near future.

Related topics