Personal Finance

New Technology Could Shift Mobile Payments Paradigm

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Consumers are obviously accustomed to digging into their wallets whenever they want to make a credit card purchase, and while many experts believe that will shift over the next few years, a new mobile payment method was recently introduced that could provide consumers with significant security.

A new mobile credit card payment option from the payment company CSI GlobalVCard, which issues MasterCard-branded credit and debit cards, was unveiled earlier this week at the Consumer Electronics Show in Las Vegas, according to a report from InformationWeek. The new option, known as a virtual credit card, differs from other mobile payment systems in that it does not utilize technology that is currently unique to just a few smartphones, like the near-field communications platforms being developed by numerous companies.

Instead, this system allows cardholders to use their account to generate unique credit card information at will, the report said. The card information is then sent to an email address as a small PNG image file, which can be displayed on any smartphone screen. But what makes the technology a boon for consumers’ account security is that the card number sent to the phone can be customized in a number of ways. For example, users will be able to set limits on individual card numbers, as well as customize expiration dates, for those unique card numbers. Once that’s done, the image can be shown to a cashier and entered as with any other card payment.

But the added security of this type of payment system is that, if consumers are concerned about their accounts being compromised when their card number falls into the wrong hands, they can create a unique account with a credit limit of the exact price of the purchase they’re making, the report said. The system may also be ideal for consumers who want to use the card to give their children an allowance but still limit their spending.

Mobile credit card systems are expected to be the wave of the future in the payment industry, but experts say that there are some hurdles to widespread consumer adoption, such as the perception that these methods are less secure than traditional card use. Still, within the next few years, the payment card industry is expected to be worth tens of billions annually.

[Credit Cards: Research and compare credit cards at Credit.com.]

Image: CSI GlobalVCard

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