Is Your Next Credit Card Your Cell Phone?

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"Hopefully, everyone gets a better deal out of it," said Bezard. "Money is already digital in many respects, but it would be great, all the way to the finish line, to have the payment disappear into the device."

NFC-Enabled Phones Pose New Class of Threats, Security Expert Says

Experts warn that before consumers and corporations jump on board the new technology, security concerns need to be addressed. With credit card account information tied so closely to users' mobile phone, identity theft could become a rising concern.

"It's probably a new enough technology that concerns over the security are healthy," said Jonathan Giffin, a Georgia Tech College of Computing professor who specializes in system and software security. "Until this technology is analyzed in a public way by experts in security and wireless protocols, I think we don't know how secure this is yet."

Similar to RFID (radio frequency identification) technology, NFC technology is a kind of radio communication that works only a very short range. But Giffin said security experts have shown that RFID cards are vulnerable to attacks.

"People have demonstrated that you can walk behind someone and scan their RFID card without their knowledge," he said.

And NFC-enabled cell phones potentially pose an even greater security threat than RFID cards: Not only would these phones store a user's financial credentials, they would be connected to the Internet, he said.

Mobile Commerce Firm: Digital Wallet Is Coming

Attackers could try to access that valuable data across the Web or through nearby NFC readers.

"There's a whole different class of threats that designers need to be concerned about," he said.

Still, Francesca Nisco, a spokeswoman for Isis, a mobile payment network backed by AT&T, Verizon and T-Mobile, said that, in trials, consumers say that they're ready to embrace a digital wallet despite security concerns.

"Many people have had trials for a long time, but I think there's a recent surge of action in the marketplace because there's been an increased understanding of how much consumers are excited about this technology," she said.

The carrier-backed network was officially launched in November and in the next 12 to 18 months will roll out its mobile commerce service nationwide, Nisco said.

Forget carrying credit cards, cash, debit cards, loyalty cards, gas cards, coupons, transit passes and all the other cumbersome contents of your wallet. The new service puts it all in your cell phone.

Nisco said the company is still working out the details of its payment process, but said a hardware-based, passcode-protected and encrypted system will safeguard consumers' information.

If a user loses an Isis-connected cell phone, he or she can erase all the financial data stored on it with a single phone and then restore the information instantly with another call, if the phone is found..

The initial Isis roll-out will focus on mobile commerce, Nisco said, but mobile phones that store insurance cards, driver's licenses and other kinds of wallet-worthy information are expected to follow close behind.

"We believe that the mobile wallet is certainly coming," said Nisco. "It will certainly be some time before it is mainstream, but we certainly believe that there will come a day when everything you carry in your wallet will be on your mobile device."

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