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Mobile phones are increasingly being used as pagers, phone and address books, schedulers, alarm clocks, watches, and devices for sending and receiving e-mail and instant messages and for Web browsing.

Considering that mobile phones are increasingly becoming indispensable to their users, the next logical step would have been to use mobile phones in lieu of credit cards. However, studies have shown that users are reluctant to use their mobile phones as payment devices, owing to security threats.

However, that seems to be slowly changing now as participants at the first North American mobile phone payment and content trial have embraced the technology and expressed that the mobile device and applications significantly improved their arena experience. Participants indicated that they would like to use their mobile devices for payment at a variety of merchant locations, for any purchase size, and see value in accessing multiple payment accounts on their mobile devices in the future.

Further, trial participants also expressed interest in having multiple applications on a single mobile device, including transit, loyalty and digital content applications.

Mobile Phone Companies Set Up Near Field Communication Trials

Although mobile network operators have shown reluctance to fully back the technology, a group of companies recently conducted an advanced Near Field Communication (NFC) trial for mobile phone applications including contactless payments, mobile content and premium arena services at Philips Arena in Atlanta.

The trial was the first large-scale test of mobile phone applications in North America, and was the result of collaboration between Chase, Cingular Wireless, Nokia, Philips, Visa USA, and ViVOtech, along with Atlanta Spirit, LLC, and parent company of the NBA's Atlanta Hawks, NHL's Atlanta Thrashers and Philips Arena. The trial has been designed to enable a secure, wireless system that simplifies payment and services for arena visitors.

The trial depicted how wireless accounts can make contactless payments at concession stands and access mobile content from numerous locations throughout the arena. Users can purchase items by holding their mobile phones near a secure terminal. The contactless transactions will create faster and simpler payments at concession stands getting fans out of the lines and back to the game. At checkout, the phone is simply held near a secure reader and the contactless payment transaction is automatically charged to the user via the same secure Visa payment network that processes traditional credit card transactions today.

During the trial, which launched in Dec. 2005, 150 Atlanta Thrashers and Atlanta Hawks season ticket holders with both a Chase-issued Visa credit account and a Cingular Wireless account made payments at contactless readers supplied by ViVOtech at concession stands throughout the arena. Additionally, fans downloaded content to their Nokia 3220 mobile phones equipped with NXP's NFC semiconductor chips, including ring tones, wallpapers, screensavers and video clips of favorite players.

Fans were able to access and download mobile content such as ringtones, wallpapers, screensavers, and clips from favourite players and artists by holding their NFC-enabled phone in front of a poster embedded with an NFC tag.

Coca-Cola has also said it would equip its vending machines in Japan to accept payment through mobile telephones, an increasingly popular money option in the country. Coca-Cola Japan said its 200,000 machines by the end of 2008 will accept Felicia, contactless credit cards on mobile phones developed by cellular industry leader NTT DoCoMo and electronics giant Sony. The system will make it possible to buy any soft drink, coffee, tea or fruit drink in Coca-Cola machines in Japan by holding up a mobile to the machine, with the cost of the refreshment going on a monthly phone bill.

Is this a new trend that will catch on? Only time will tell.