The last few years have already seen a huge jump in the number of things you can rely on your smartphone for. Far from just making calls and texts and a few limited personal organiser features, the typical person's smartphone is now a satnav, an entertainment centre, a workplace, and a social hub. In fact, if a few years ago, you were to carry around individual gadgets to perform all of these functions, you wouldn't so much need a handbag as a suitcase to fit them all in.
And soon it seems you'll be able to add 'wallet' to the list of things your smartphone can magically turn into with the tap of a touch screen, as a range of new technologies to make transferring money faster, easier and safer have arrived in recent times, and over the next few months you can expect to hear a lot more about them.
From idea to execution
The idea of using a mobile phone to make a payment isn't exactly a new one. Most major banks have offered their own apps for a while now that let you check your balance and set up a payment, but they were often a bit fiddly and time-consuming – and not exactly suited to those times when you're at the front of a long queue at the till and are starting to hear impatient mutterings from the people stuck behind you.
A few ideas – such as Barclays' Ping.it – have sought to make it easier to send money casually, allowing people to send money to anyone provided you know their phone number. Great for convenience, less so if you're still coming up with excuses why you can't pay your mate back that £20 you borrowed weeks ago.
Hitting the mainstream
But now, it seems these ideas are really set to take off, with the introduction earlier this month of a new industry-wide solution. This could be the key thing that's needed to make the leap into the mainstream, as until now, you had to have an account with the right bank or credit card to make a payment.
Called Paym – pronounced Pay Em – the scheme was unveiled earlier this month and is set to arrive in the UK later this year. And the people behind the idea, which include a number of banks, building societies and the Payments Council, have big plans for it.
Like the Ping.it app, it will allow people to send money to anyone using just their phone number – so no more back and forths with friends and family asking for their account numbers and sort codes before you can complete a payment.
According to the Payments Council, the scheme has the potential to link every bank account in the country with a mobile phone number and take much of the hassle out of these payments. The body said: "It will be easy to pay a friend back for dinner, pay the plumber or even transfer money between accounts on the move." All you'll have to do is pick the person from your contact list – it's as simple as that.
At launch, customers of nine bank and building society brands – Bank of Scotland, Barclays, Cumberland Building Society, Danske Bank, Halifax, HSBC, Lloyds Bank, Santander and TSB Bank – will be able to use the service, with it set to be extended to many others over the coming years. So if yours isn't mentioned just yet, a little patience goes a long way.
But what about in-store?
While Paym could mean you never have to owe friends money again, this is far from the only way that people's smartphones are increasingly being used to replace a wallet. With the advent of technology such as near field communications (NFC) the concept of contactless payments for mobile devices is also showing much promise.
If you've ever tapped an Oyster card on London's public transport system, or even if you have one of the new generation of contactless credit or debit cards, which are increasingly common, you'll be familiar with the concept. And as more of the latest phones are coming equipped with the same short-range NFC chips installed, it may only be a matter of time before all of us are paying for items in store with just a tap of our mobile phone – no more tapping away at chip-and-PIN machines or filling up our pockets with copper change when paying by cash.
Visa's payWave technology and Google's Wallet app are some of the big players offering this technology. At the moment, places where you can use it are still fairly limited – but as more people gain access to the technology, you can be sure that in the coming years, you'll start seeing it more and more. And the result might be you can add your wallet to the pile of gadgets gathering dust in a drawer as smartphones take over their jobs.