Morning Cup O' Joe

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Cell Phones as Wallets

Will cell phones replace plastic cards as the new medium for electronic funds transference? Apparently this is old hat in Japan and Korea where cellphones have special microchips that are used in RFID-like transactions to purchase goods.

What’s interesting is that in the Philippines, these transactions are being done via SMS (text messaging).

The system is particularly useful for the 8 million Filipinos — 10 percent of the country’s citizens — who work overseas and send money home, like Dennis’ mother, Anna Tiangco. Previously, she sent money via a bank wire transfer, which costs $2.50 and takes two days to clear. The cell phone method costs only 13 cents and is nearly instantaneous.

“The good thing here is, wherever my children are, they can text me and I can send money immediately,” she said in a telephone interview.

Tapping into the cash flow from overseas Filipinos — who sent home $12.7 billion last year — Globe and Smart forged partnerships with foreign mobile providers and banks, as well as with local banks and merchants, to create a network that allows users to send and receive cash internationally.

When Anna Tiangco wants to send cash home, for example, she goes to a branch of her local provider, Hong Kong CSL Ltd., where a clerk credits her cell phone with the amount she has brought with her. She then transfers the money to family members via text messages — in essence instructing her providers to deduct money from her balance to the recipients she indicates.

What if your phone is stolen? Apparently this situation is covered.

If a cell phone loaded with cash values is lost or stolen, the money can’t be tapped as long as the personal identification number isn’t revealed. Control over the funds can be restored with a replacement SIM, or Subscriber Identity Module, card from either mobile provider.

Here’s the article I took quotes from. Has anyone heard about this technology or made use of it?

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October 1, 2007 - Posted by | News, Science and Technology

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