Making Mobile Phones Into Electronic Wallets

July 15, 2005 — -- 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.

A Pay Phone of a Different Sort

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.

While OneWallet is analogous to a leather wallet, Desai says it's actually more like a portable online banking system. For example, in addition to paying for merchandise at local stores, OneWallet users might be able to transfer funds among bank accounts, pay other bills or even forward funds to others -- a child with a OneWallet account, say.

And just like an ordinary wallet, Desai says the digital version is simple to use. "You can complete any transaction in a couple of clicks," says Desai.

Detractors to the electronic wallet systems, however, are quick to note that it may take some time for ideas like OneWallet to catch on in the United States. For one, many industries -- service providers, banks, cell phone makers, merchants and retail stores -- would have to agree to use the system and install the necessary equipment.

What's more, consumers would have to be convinced that such systems would be faster and as safe -- or safer -- than current credit card payment systems, which have recently come under many security and privacy breaches.

Desai is confident that OneWallet will meet those consumer concerns. He says the company has spent years developing the software and a majority of that time was spent on security issues.

But what if a OneWallet cell phone is lost or stolen? Unlike losing an ordinary wallet, Desai says preventing unauthorized use and charges is a matter of making one phone call.

"In one call you can completely lock up your entire wallet," says Desai.

Of course, since you'd lose your cell phone along with your digital wallet, to make that call, you might have to find an actual pay phone -- and coins to feed it.

-- Larry Jacobs, ABC News

Video Games: Not Just Mindless Fun

Nothing good can come out of playing video games, right? At best, they're nothing but entertaining bits of fun, diverting our attention for a few minutes or hours.

At worst, as some detractors will allude, the hours spent playing violent games like Grand Theft Auto or Doom 3 will turn impressionable gamers into brutal, real-life killers.

Not so fast, says one author.

Steven Johnson, author of "Everything Bad Is Good for You," says there are too many misconceptions when it comes to today's video games.

"The first thing … the best sellers [lists] are dominated by non-violent games," says Johnson. "The top-selling PC game of all times is 'The Sims,' which is entirely nonviolent, and then you have sports simulations and military simulations that don't involve a lot of gore."

The other fallacy, says Johnson, is that video games are "mindless" forms of fun.

"The other thing is that they really involve, increasingly, very complex forms of problem solving," says Johnson. "Games are really hard. They take a lot of thought and kind of rigorous thinking to make it all the way through."

Johnson cites several recent research studies that suggest the complexities of video games actually help players think and perform better in other difficult tasks.

In one study involving a military shoot 'em up game, Johnson says researchers "found that people who were regular players of the game were better at picking up visual information in the real world and that they, literally, were learning to perceive the world better."

"Some of these games in some ways are more complicated than chess in that they have more moving parts and ambiguous rule systems and a more open-eneded structure," says Johnson. "They're not teaching kids about life in a sense or calculus, but they are teaching them how to think and how to reason and how to solve problems."

The positive benefits of video games, says Johnson, are really not that much different from those that people get from playing other games such as chess.

"People accept that chess isn't teaching us anything about the world and we're not getting any values from chess," says Johnson. "But we also accept the idea that chess is good for you and that it's a good mental workout."

And unlike chess, video games fit well in the so-called "regime of competence" principle of learning.

"People learn best when the environment is challenging but not too challenging. If they are overwhelmed, they're not going to learn, and if everything's too easy, they're not going to learn because they're going to get bored," says Johnson.

"Games live permanently in that zone … Because the games -- as most game players tell you -- get more complicated as you play. They know how good your skills are at the beginning and they slowly ratchet it up and make it more complicated as your skills increase," he says. "They are learning machines designed specifically to train your ability to play the game."

But before gamers take this as a license to spend hours upon hours of staring at a screen and giving your minds -- and thumbs -- a workout, Johnson does suggest moderation.

"In my book, I argue that there should be a balanced media diet," he says. "There is a positive benefit that you can get from playing games some of the time, just as there is a great positive benefit you get from reading or running around throwing a ball around outside."

-- Larry Jacobs, ABC News

Cybershake is produced for ABC News Radio by Andrea J. Smith.