Out of Cash? Use Your Phone

Charlene OHanlon

Used to be, if you were out of cash, you were out of luck. Then the ATM was born, giving everyone with a bank account 24-hour access to their money. Now, a new breed of mobile apps is enabling us to leave the cash behind altogether.

Want to make a donation to help the earthquake victims in Haiti? There's an app for that. Want to use your PayPal account to make a purchase via your smartphone or donate to a worthy cause? There's an app for that. Want to make sure the price you're paying in-store isn't more than what you'd pay online? There's an app for that.

We are moving closer and closer to a cashless society, driven largely and simply by the desire to carry fewer things around. That's part of the charm and success of the iPhone-you don't need to carry a separate phone and MP3 player-both are packaged together in one sleek little design. Soon enough, you'll be able to eliminate your wallet as well.

Okay, that may be overstating things a bit, but apps such as the PayPal donations and others signal a change in the way we view our mobile devices. There was a time when most folks wouldn't dream of checking their bank balance online because of security fears, and today we throw money around cyberspace like it's no big deal.

But there's a lot more that has to happen on the back end before we can rely on our mobile devices to be our monetary devices as well. Merchants who want to use the power and the simplicity of a mobile app first must forge business partnerships with the carriers, who in some cases would be the ones handling the transaction. Remember when the Red Cross Haiti relief effort urged us to donate $10 by texting 90999 on our cell phones? The carriers handled those transactions, which showed up as a charge on our cell bill. It's not inconceivable that other transactions for less philanthropic things-like ordering a new pair of jeans via an app-could be billed in the same fashion.

The question is, do the carriers really want to? It's one thing to charge for an app-it's in their best interests, since they're the ones making the money-but would they feel the same way about handling the billing for, say, dinner for four at The Olive Garden? My guess is no, unless they receive a portion of the sale.

I've no doubt this is the direction we are heading. The transaction processing technology is there; it's a matter of the buy-in from all parties. Pun intended.

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