Smartphones Get Smarter About Payments

  1. Pay as You Go

    Pay as You Go

    Paying for the morning commute will soon be accomplished by the wave of a smartphone. State and local governments are joining Internet, credit card, and wireless companies to let consumers pay for everything from groceries to bus fare with mobile phones. Current mobile payment techniques are simply secure systems for sending credit-card data over a smartphone. A newer technology that's driving change is near field communication, or NFC, which lets shoppers pay for goods by passing their smartphones over electronic sensors.

    In 2010, fewer than 6 million phones were NFC-equipped, according to ABI Research. By 2013, as more handset makers incorporate the technology into new devices, that number is expected to reach 172 million, according to the market research firm. Salt Lake City is one of the first municipalities to adapt to the coming explosion in mobile payments. The Utah Transit Authority installed NFC sensors on its buses, trains, and light rail in 2009. Now, thanks to a partnership with Isis, a wireless industry joint venture, Salt Lake City commuters will pay fares with a pass of their mobile devices. Here are more examples of local and state governments setting up mobile payment systems.
  2. Transportation


    Next year, Salt Lake City residents will pay for public transit by passing their smartphones over an electronic sensor, if a deal between the Utah Transit Authority and Isis, a mobile payment joint venture between AT&T (T), T-Mobile, and Verizon (VZ), comes off as planned. The UTA has been testing the technology in its buses, trains, and light rail since 2009. New York City and Chicago have piloted NFC on mass transit, but the UTA-Isis partnership is the first full-scale launch of its kind.
  3. Universities


    Educational software maker Blackboard (BBBB) has installed near-field communication hardware at more than 100 college campuses, including Florida State University and the University of Texas at Tyler. For now, students use NFC-enabled cards at dining halls, campus stores, and laundry machines, and to gain entry to dorms and sporting events. Blackboard says a software update could allow students to use smartphones to do all that as early as next year.
  4. Parking Meters

    Parking Meters

    Drivers in Boston, Seattle, and some 100 other U.S. cities can pay for parking by smartphone using Parkmobile USA's app. Motorists pay Parkmobile a convenience charge for each transaction; municipalities keep the rest. Drivers without smartphones can sign up on Parkmobile's website and feed meters by calling a number displayed at curbside.
  5. Taxes


    Arkansas touts itself as the first state to let residents pay property taxes via smartphone. In 2009, the Information Network of Arkansas, a public-private consortium created to improve government accessibility, and private contractor NIC (EGOV) launched GovPay, allowing Arkansans in 28 of the state's 75 counties to pay tax bills via mobile phone.
  6. Prisons and Courts

    Prisons and Courts

    GovPay also lets Arkansans deposit money in inmate trust accounts, which prisoners can use to prepay for phone calls or to buy personal items. For those not incarcerated but dealing with the courts, Arkansas accepts mobile payments for court-mandated restitution and fees associated with criminal probation.