Will our cellular phones be our next Credit Card?


During the last 2-3 days we have been bombed by news from two of the main phone producers in the world, Motorola and Nokia, both claiming to have achieved the "next thing" in the mobile phone arena: the ability to use the mobile phone as a financial/commercial tool.

First was Nokia, which has announced their Nokia Money service, operated jointly with Obopay:

The Nokia Money service is supposed to be the bank-on-a-phone: it is expected to enable simple financial services, payments, purchases, money withdrawal as well as deposits at specific agents, and more.

Articles like this one at ITWire tell us that the service will debut in the first days of September, and that at this very moment Nokia is busy recruiting a large number of Nokia Money agents to make the service available in wide regions.

The second one to announce financial services is Motorola, which is announcing the beginning  of a pilot of their M-Wallet in Taiwan, on their way to activate the full service in China in the next months.

M-Wallet is a different concept based on a small extra-thin electronic card which can be printed on a sticker-label to be stuck on the SIM card. It is thin enough to go with the SIM card into the SIM slot. This card will be able to store and to transmit (under our discrete authorization) data of credit cards, frequent flyer numbers, etc. In general, very similar in the storage functionality to what we (Windows Mobile users) do today with Flexwallet and Codewallet, but with the ability to be used for electronically paying commercial transactions, withdrawing money, etc, etc.

If we look at both technologies and companies, we could say that each company has advantage on a different field. While Nokia has the advantage of its size and leadership in the European market at least, Motorola has the advantage of the experience of development for four platforms: their own proprietary platform, Windows Mobile, Android, and Symbian.

It is quite clear to me that the success of these technologies heavily rely on the ability of the companies to make them a commodity in all phone platforms and in all businesses. Nokia's technology won't help me if it doesn't support WM phones, since I am currently a WM user. On the same way, none of them will help me if it will take me hours of walking around to find a business that will support their technology.

In any aspect, though, I believe that this is the jumpstart of the participation of mobile phones in our regular financial life. I quite believe we will still be holding our plastic cards for some years from now, but there is a good possibility that little by little the mobile phone will be taking over these activities.