April 26, 2012, 10:19 AM

Do mobile devices represent the future of money?

65% of mobile and finance experts say yes—by 2020.

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Within the next decade, many consumers will be paying, both in stores and online, with their mobile devices, according to a new survey of mobile technology and finance experts.

Many of the 1,021 experts surveyed by Elon University’s Imagining the Internet Center and the Pew Research Center’s Internet & American Life Project say the security, convenience and other benefits will lead many consumers to routinely use mobile wallets—in which they can store details of their credit cards and bank accounts on smartphones and tablets—for  everyday purchases by 2020. Others—including some who are generally positive about the future of mobile payments—expect this process to unfold relatively slowly due to a combination of privacy fears, consumers’ preferences to pay anonymously in some cases, a lack of infrastructure to support widespread adoption, and resistance from those with a financial stake in the existing payment structure.

65% of respondents agreed with a statement that, in short, said by 2020 most people will have fully adopted smartphones as payment mechanisms, nearly eliminating the need for cash and credit cards, and that consumers will come to trust and rely on the technology for mobile web and in-store transactions.

However, 33% agreed with a statement that, in short, said consumers will not trust the use of near field communication, or NFC, technology that many project will provide the wireless link between mobile devices and store cash registers, that there will not be a major conversion of money to an all-digital format, that security issues will keep consumers from embracing mobile payments, and that consumers don’t want companies learning any more about their purchasing habits. Another 2% of respondents surveyed did not agree with either statement.

Those who believe mobile payments soon will go mainstream in the United States point out that consumers in many parts of the world are already paying with their mobile phones, and that money has largely been digitized in the modern economy. Mobile payments build on this ongoing digitization, but with an additional layer of security and convenience for consumers, they say.

“For many of these experts, mobile money represents more than just existing processes adapted to a new, more portable form factor,” says Janna Anderson, director of Elon’s Imagining the Internet Center and a co-author of the study. “They see this as an opportunity to implement security measures that are lacking in our current financial systems, to offer consumers more control over their spending, and to even reinvent the way we think about the concept of money. Top people from Microsoft, Nokia and Netflix were among the many who said it is up to those who control transaction systems to set the timetable for adoption.”

Following is a selection of survey respondents’ remarks:

* “The 2020 date might be a bit optimistic, but I'm sure that this will happen,” writes Hal Varian, chief economist, Google. “What is in your wallet now? Identification, payment and personal items. All this will easily fit in your mobile device and will inevitably do so.”

* “We have already witnessed the transition from cash to debit and credit cards,” writes Christian Huitema, distinguished engineer, Microsoft Corp. “The electronic wallet is not much more than a virtual card, in which near-field wireless communication replaces the reading of a magnetic stripe.”

* “There will be a need for people to have an anonymous wallet that can be used for payments that are not traced to them personally,” writes Bruce Nordman, research scientist, Lawrence Berkeley National Laboratory.

* “When credit cards arrived, checks did not disappear, and neither did money,” writes Amber Case, CEO, Geoloqi. “Although in some places either cash or cards are accepted, there are three main methods of payment. If another method of payment is added, we will likely have four methods of payment, and retailers and businesses must accept another form of payment.”

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