Making Mobile Phones Into Electronic Wallets

July 15, 2005 &#151 -- In this week's "Cybershake," we take a look at a company's plan to turn your cell phone into an electronic wallet. Plus, an author takes the unconventional view that playing video games might actually be good for you.

Cell phones have become the digital equivalent of a Swiss Army knife. Built-in camera lenses allow users to capture images. Color screens and faster wireless networks allow owners to watch television-like programs and news broadcasts.

And one day soon, owners will be able to turn to their digital cell phones for another important task while out and about: To pay for stuff.

In Japan and Europe, savvy mobile phone owners have been able to use their handheld as an electronic wallet for quite some time. And several companies have been quietly working to bring such capabilities into the various cellular service networks used by providers in the United States.

One such company, C-Sam, Inc. in Chicago, says its OneWallet system will be ready to go in the United States by next year. And how it works is fairly simple.

Software resides on the cell phone and stores information -- account numbers, expiration dates, the issuing bank or financial institution -- that would be associated with any physical credit card. All that data would be locked by a personal identification number or PIN.

"Once you open it [OneWallet] up with the secure pin, as a consumer, you can pick … exactly which card you want to use and you can use it for whatever application you want to transact on," says Mehul Desai, chief operating officer of C-Sam. "They can actually beam their same card information from this digital wallet to a point of sale [terminal]."

Cell phones using the OneWallet system would have built-in infrared or radio transmitters to "beam" the payment data over to a retailer's cash register equipped with a correspondent receiver called MerchantWallet.

The electronic transaction would be processed just like any other credit card purchase. But unlike traditional purchase, OneWallet users won't have to deal with signing any credit card charge slips. Instead, the MerchantWallet system transmits a digital receipt to the customer's cell phone, so there's a record of the transaction.