Column: ‘I just paid for my shopping using my smartphone’

How long will it be before I can pay for takeaway coffees, my weekly shop and new clothes without even seeing the Queen’s head on my fivers and tenners.

To find out I asked Mary Carol Harris, vice president of innovation and new product development at Visa, and discovered that so-called “contactless payment” technology will help you quickly and securely use your smartphone to pay for things before the end of 2011.

How does contactless payment on a smartphone work?

Mary showed me a range of upcoming iPhone 4 and Blackberry smartphone cases that will soon let you pay for anything simply by wirelessly swiping the phone over the same in-store electronic reader similar to the contactless payment cards already in use in the UK.

The phone cases will launch here later this year - costing between £20 and £30 – and contain two high-tech elements that enable you to pay securely without cash.

1. The secure element – this stores your credit or debit card’s details
2. An antenna – this allows the element to check your balance with your bank each time a payment request is made at the till.

What’s it like paying with a smartphone?

The one I tested let me move small sums from my current account into a separate wireless payment account, meaning that, should the worst go wrong, I would never be more that, say, £50 down.

Making payments was fast and simple - a pretend waitress set her Chip and Pin style machine to ask me for £10. When the machine was swiped underneath my iPhone 4 the smartphone prompted me to confirm the payment.

A “transaction complete” message was then displayed on my iPhone 4 as the waitress brought me a receipt.

The drawbacks of contactless smartphone payments

Once wireless smartphone payments become more widely accepted, Visa’s Mary claimed that some stores could start managing loyalty card transactions and money-off coupons in the same single transaction as the payment.

But all that could be some way off, Mary warned, because “credit cards will still exist for many years to come”.

She admitted that although many smartphone users are ready and willing to use wireless payment technology for their everyday payments, Visa and its financial partners need to take consumers on “a journey of contactless payment acceptance”.

The biggest barrier to widespread use is security perception. Though wireless payments themselves are already secure, Visa hopes it can introduce more sophisticated security measures. You’ll also be asked for a pin on all payments over £10 or £15, she added.

Nonetheless, Mary was confident that 2011 will be the year that Near Field Communication – the technology behind wireless payments – launches in numerous locations across the UK.