PluggedIn: Wireless wallets come closer to reality

Sinead Carew

NEW YORK: Imagine being able to pay for a song on the jukebox, buy a bag of groceries or gain admission to a sports arena by simply waving your phone by a machine.

With consumers in Asia and Europe already using their mobile phones to pay for soda and parking fees, the long discussed concept of the wireless wallet could be slowly creeping closer to reality in the United States.

In countries such as Sweden, Ireland and the United Kingdom drivers can avoid putting coins in a parking meter by simply sending a text message on their mobile phone.

About two million customers of Japan's NTT DoCoMo Inc can already use mobile phones with built-in debit cards to pay about 20,000 merchants such as restaurants and supermarkets.

U.S. companies have been quiet about mobile commerce since hype about wireless wallets was deflated when the dot.com bubble burst in 2000. Many are still skeptical, but some are warming to the idea again amid U.S. and overseas developments.

"The (mobile commerce) discussion has more validity now. The technology and the business models are evolving," said Chris Bierbaum a business development executive at Sprint, the No. 3 U.S. operator.

The popularity of music ringtones is one sign consumers are ready to use phones for buying more than calls. Music labels now see wireless as a key market after U.S. consumers spent $223 million on ringtones in 2004 according to Yankee Group.

Motorola Inc., the world's second biggest phone maker, is doing tests with MasterCard and it expects its phones to support credit card payments in 2006.

Along with Philips and other companies Motorola is also working on a technology that would have consumers waving their phones at posters or ads to read a Web address, where the user could then buy the goods advertised on the poster.

Yankee analyst Adam Zawel forecast mobile commerce transactions worth over $1.2 billion in Europe in 2009, up from $243 million in 2004 while transactions in Asia will increase to $1.7 billion in 2009 up from $370 million in 2004.