Using smartphones to pay

Have you heard of NFC, short for near field communications? Some firms think NFC will be the payment method of the future, a kind of digital wallet that allows you to wave your mobile at the point of sale and pay for your purchase quickly and conveniently. As shown above, NFC payments are available in Japan, but they're still in the testing stage in other parts of the world.

Visa is about to test a new NFC system in North America and, with Samsung, is planning a NFC programme for the 2012 London Olympics. In fact, Samsung is about to launch its Galaxy smartphone with NFC functionality.

Nokia is showing its NFC capabilities (but not actually completing payment transactions) by enabling the technology via the super-popular Angry Birds game. Research in Motion, maker of BlackBerry smartphones, has a new NFC mobile.

Having mobiles ready for NFC creates a base of customers equipped for digital payments. Now retail establishments must have the ability to accept digital payments via mobile, and the banks must be capable of processing these transactions.

A larger question is: Will customers actually use NFC? Will it be fast, convenient and secure? What extra benefits will it offer to encourage switching from cash, credit or debit cards?