Smartphones are very popular with more than just the 20something set. This is because with all of the new applications and add-ons, the phones have becomes a versatile business tool. This is something which has not been lost on the credit card companies or the banks. They see how willing the public is to make payments and purchases right from their cell phones, which has given them the idea to allow the public to take it to the next level.

Companies like Bank of America are getting into the swing of things by hooking up with major phone service providers like AT&T, Verizon and T-Mobile USA. The objective is to add an RFID chip into the phone which will allow it to act just like a credit card. The difference is unlike a credit card, whose signal can be duplicated, there are safety features which are inherent in the smart phones which will prevent theft.

When a credit card is used to make a payment, the only thing that happens is the reader gets the information from the magnetic strip or the RFID chip embedded in the card to access the account. If there is enough credit to accept the payment, the payment is authorized and the money is released. The problem is other than the cashier performing an inspection of the person making the purchase along with their card, there is no way to make sure that the card is genuine or that he user is authorized to use the card.

When you use a cell phone to make a payment, the personal information from the user is already in the phone. This offers one level of security. An additional level of security is that the new point of sale systems capable of receiving the payment will be able to look up the GPS location of the phone. If the location matches up with the location where the payment is trying to be authorized from, it is verified that the user is authorized and that the information is genuine.

There are two obstacles to the new system of payment:

1. Those using the payment systems do not want to pay the extra money to get the add-on if they are not certain that there will be places that they go to which will accept the new payment option. Since they do not see businesses advertising that they take the new payment, it is not in their best interest.
2. The businesses which need to install the new business POS systems will not do so unless there is a demand for it. They are looking at the price of the upgrades and they are not able to substantiate the expense if there is not going to be anyone to use it.

To overcome the issue, many businesses are looking at offering invectives to customers who install it and rewards programs for businesses which use the new POS systems to draw in more clients.

Shannon Suetos is an expert writer on phone systems based in San Diego, California. She writes extensively for an online resource that provides expert advice on purchasing and outsourcing decisions for small business owners and entrepreneurs such as VoIP serviceat Resource Nation

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