Imagine zipping through the line at Duane Reade without ever touching your wallet, or grabbing a Shack Burger without reaching into your purse — stopping only to take out your phone and tap it on a terminal.
Smartphone technology that will become ubiquitous may very well replace that hunk of leather you carry everywhere, rendering obsolete the question, "Cash or credit?"
"All that kind of stuff will eventually be supplanted by mobile phones," said James Wester, editor of MobilePaymentsToday.com. "It'll take some time, and it's gonna have a lot to do with whether customers will see it as a huge step up ... but in just a few years the way we pay may be entirely unrecognizable, and it'll just be considered the way we do things."
Near Field Communication is at the heart of the mobile payment movement. Currently there's only one phone that uses its NFC payment chip, the Android-powered Samsung Nexus S — a far cry from the technology's deep integration into foreign markets, such as Japan, which is years ahead on the mobile payment front. But by late 2012 some 50 NFC phones should be on the market.
Leading the fight for your digital pocketbook is Google, which launched Google Wallet in a field test in May. The wallet lives on your phone, and holds info for your Citi MasterCard. Through NFC, you'll simply tap your phone to a terminal, enter a PIN and poof — instant transaction.
"The variety of players in this market speaks to the promise of mobile wallets," said Google spokesman Nate Tyler, adding that Google coupons are built into the wallet. "We're really just at the beginning of this whole thing, and we're really excited to see where it will go."
Indeed, Google is far from the only player. Isis, a competing NFC-based mobile wallet from AT&T Mobile, Verizon Wireless and T-Mobile and with support from all four major credit card companies, test launches early next year. Visa, American Express and Bank of America and others — along with a handful of tech start-ups — will also have their own networks up and running over the next year or two.
"I think we're in the midst of a digital transformation," said Dave Wolf, vice president of network capabilities for AmEx. "We are focused very much on the digital space, and we are well aware of this fast-changing landscape."
Not to be outdone, the king of digital payment, PayPal, will go head-to-head — and even sometimes hand-in-hand — with the old guard.
Embracing smartphone apps, NFC tech, Bluetooth and other methods, PayPal's plans are broader than its competitors — it wants to be seen as "payment and device agnostic" — and its mobile payments acceptance is skyrocketing: The company expects to generate some $3 billion from mobile by the year's end, up from about $750 million last year, according to its senior product manager for mobile, Avin Arumugam.
However, much stands in the way of mainstream acceptance of these new ways to pay. Both consumers and merchants must be convinced to accept the methods, the huge number of market competitors could lead to a bottleneck, and the infrastructure it will take for mass deployment is nowhere near what it will need to be.
"It'll take some time, and it'll have a lot to do with whether consumers see it as a huge step up," he said. "The vast majority of people are gonna have to be convinced to use it, and to do that they're gonna have to be offered something they're not getting," he said.
So will you someday be able to leave the billfold at home? Not quite.
"Cash is always gonna be around," Wester said. "And you'll always need to have something to carry it in."
With the economy hopelessly in the dumps and the American people trying to put their financial house in order, could a transition to easy smart-phone payments drain bank balances faster than you can say personal bankruptcy?
"I think it's only going to make people more comfortable with spending at a time when we need to get more comfortable with saving," said personal finance expert and amNewYork financial columnist Farnoosh Torabi.
"The further away we get from using actual paper money, the more money becomes abstract to us," she said. "There is something to be said about using cash, because it feels more painful when we use it, and that's kind of the kick in the pants that some of us need to curb our spending."
The stakes are high, especially since fresh numbers show Americans have reduced the average credit card debt they carry to $4,699 — down 5 percent in a year — and personal net worth has actually inched up for a change.
We’re hardly the nation of savers we once were, so phones that make it a snap to pay may not be for everyone.
Said Torabi: "If you really wanna get a handle on your finances, maybe you wanna skip this feature."
But for some New Yorkers, the idea of using of cell phone payments is too tantalizing to pass up.
"I can't wait," said Dave Carron, 26, of the West Village, who's planning to buy an NFC phone the next time he's looking. "I'd love it if my phone's the only thing I need to carry, it's just so easy."