I Drink Your Milkshake: Your Credit Card is My Mobile Phone

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It's always fun to watch I Drink Your Milkshake moments play out in the corporate world - those dramatic moments when one company announces that it will take over another company's entire industry, and there's nothing you can do about it. Google does it all the time -- but it's usually directed at a company like Apple, Facebook or Microsoft. This time, however, Google has its straw pointed at the milkshake that belongs to the major credit card companies.


Suspend belief for a second and imagine Google CEO Eric Schmidt as Daniel Day-Lewis in There Will Be Blood. In his keynote address at the Web 2.0 Summit in San Francisco, Google CEO Eric Schmidt laid out a vision in which Android-powered mobile phones would be capable of making payments:

"Eric Schmidt, Google's chief executive, showed off the company’s next Android-powered phone, which will contain a chip that will allow people to make payments via their handsets. Opening this year’s Web 2.0 Summit in San Francisco, Schmidt showed off the new phone, which had the manufacturer’s label deliberately covered up, but is assumed to be the next Nexus device, following the Nexus One, and will contain a Near Field Communication (NFC) chip, that will allow people to use their phones like credit cards. [...] The latest version of Android, called Gingerbread, due to come out in the "next few weeks", will power this new handset according to Schmidt, and will feature this new mobile payments system as a key tool. "This could replace your credit card," Schmidt said." 

Moving from a card-centric view of payments to a device-centric view of payments is no longer a hypothetical what if? More companies are experimenting with innovative ways to transform mobile devices into a "digital wallet" capable of making and receiving contactless payments. The emerging NFC technology mentioned by Google at the Web 2.0 Summit makes it possible for a mobile device to wirelessly communicate with another device or object at very close range and exchange data. By doing so, the NFC chip has the potential to reshape the mobile payments space by shifting the payment experience from plastic cards to mobile devices.

Keep in mind that TIME magazine recently named the Square payment system - which threatens to disrupt credit card companies at the low end of the market - one of its Top 50 inventions of the year. The wildcard, of course, is Apple, which is rumored to be looking into integrating an RFID chip into the next iPhone 5 to facilitate NFC payments. Once customers are able to purchase NFC-ready smart phones, the market for contactless payments should really take off. 

[image: I Drink Your Milkshake]

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