Your Phone Replaces Your Wallet

During its most recent pledge drive, the popular public-radio program This American Life followed a familiar script, exhorting its users to chip in $10, $5, even just $1, to help pay for its weekly broadcast. The pitch wasn't new, but one of the payment methods was instead of heading to your computer and entering your credit-card information, you could simply send $5 to the show via text message. Long promised, never realized, mobile payments will finally take off in the U.S. in 2010. Already the sector is a beehive of activity, with companies like Zong and mPayy enabling customers to pay for online purchases with only a phone number. Obopay, another mobile-payments company, received $35 million from Nokia in 2009, and it will have a wide rollout on that company's phones. Perhaps the best sign that the sector is poised for takeoff is that Twitter creator and tech superstar Jack Dorsey has set his sights on it. His new company, Square, launched in December, allows merchants to accept credit-card payments with cell phones. True, Square doesn't untether us from plastic just yet, but it's only a matter of time before "Cash or credit?" becomes "Cash or cell?"