New Wireless Trend: Mobile Phones As Virtual Wallets The use of mobile phones to exchange money is a main theme at this week's wireless industry conference in Las Vegas. Last week, PayPal introduced an iPhone app that lets users pay for items by tapping their handset against another phone.

Bump For Cash: Phones As Virtual Wallets

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LINDA WERTHEIMER, host:

So much of our financial life is managed on computers now, it seems inevitable that we should use mobile phones or Internet-enabled smart phones to do our banking. It's on the agenda at the wireless industry's annual conference this week in Las Vegas. We called MORNING EDITION's technology commentator Mario Armstrong to find out more.

Mario, welcome.

MARIO ARMSTRONG: Hi, Linda. Thanks for having me in.

WERTHEIMER: What about this thing that I'm hearing about called Bump?

ARMSTRONG: It's a piece of software that currently runs on the iPhone that enables you to take my iPhone and bump someone else's iPhone that has the same application, and we could exchange dollars right there physically by bumping our hands together.

WERTHEIMER: You're really talking about knocking into something? I mean, a literal bump?

ARMSTRONG: A literal bump. It's just a tap. It's like two hands coming together for a slight tap. Back in the days of Palm Pilots, you would actually aim one device at another through infrared and you could beam contact information. Well, it's the same idea, but now we're moving it into transactions, and now it's a little bit more physical, not just based off of infrared.

WERTHEIMER: Is this safe? I mean, what if I just came up to you and bumped your cell phone when you were using it, would I then have all your money?

ARMSTRONG: Well, it depends. Do you have a nice bank account? No, I'm just kidding. First off, you have to have a PIN or a password that's assigned to every transaction. And that's supposed to help, you know, prevent any unauthorized use. But however, as mobile payments and using mobile devices to pay for transactions rises, we will obviously see more types of security threats in this area.

WERTHEIMER: I wonder if maybe one day you'd be able to go into Wal-Mart or Macy's or something and just sort of point your phone or bump your phone into the cash register and use it like a credit card or a debit card.

ARMSTRONG: Absolutely. I mean, that's happening in a lot of other places across the globe. You can - in Austria, for example, in Korea, in some other places -Seoul, Korea and other places, you can use your mobile device to make those types of transactions like you just imagined.

Starbucks is doing a test in select markets, where you can use your iPhone, and it becomes your Starbucks card. So you'll be able to check your balance, register your card and make purchases.

In Arkansas, we're seeing that they have become the first state to offer mobile payments for e-government services, things like secure payments for inmate trust account deposits or probation and parole supervision and restitution payments and property tax payments. So I do see more mobile transactions taking place.

And I still think that the industry overall, Linda, still has to define what a mobile transaction really is. Is it what you just defined, kind of replacing the credit card process? Or is it just doing some of these things where we can buy things off of the Web off of our phone?

WERTHEIMER: So, Mario, do you do your own banking on you iPhone?

ARMSTRONG: Yeah, absolutely, I do. You know, I had a certain amount of hesitancy initially, I think, like everyone else does. But as you become more used to doing it - and the convenience is really incredible - the ability to transfer funds on the spot or look at multiple accounts on the spot, to be able to have almost a virtual wallet at your fingertips is something that I see definitely happening more prevalent in our near future.

WERTHEIMER: Mario Armstrong is MORNING EDITION's regular technology commentator and host of the show DIGITAL CAFE on Baltimore Public Radio Station WYPR.

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