"I expect my smartphone to eliminate the need to carry around four different forms of payment," said David Tisch, Investor & Managing Director at TechStars. "I think the phone takes the place of the wallet at some point."
Tisch's expectation seems to be shared by a rapidly growing group who have started using alternate payment methods such as Square, a smartphone accessory that allows vendors to accept credit cards on their Internet-connected devices. This type of practice is only the beginning of a much larger movement toward a cashless society.
Virtually the entire financial and technology world is keeping a close eye on the development of NFC (Near Field Communications), which allows enabled devices to wirelessly communicate with each other. This technology has already been at play in smartphones, most notably in the popular mobile app Bump, which allows users to transfer data to another smartphone simply by bumping phones together.
It's safe to say that no other mobile location technology has more riding on its success than NFC. Citibank and Mastercard have been at work for years on an NFC payment system called PayPass, first conducting trials in the New York City subway and eventually infiltrating nationwide chain retailers. Google recently announced an initiative called Google Wallet, which aims to provide users with—you guessed it—a virtual wallet. Others are expected to follow suit, begging the question: Will NFC change the face of the banking and transaction industry forever?
Featured in this video: