Mobile Phones to take the place of Cash

Increasingly mobile phones are being used as a means of electronic payment.

Arthur D. Little, a firm of management consultants reckon that worldwide payments using mobile phones will climb from just $3.2 billion in 2003 to more than $37 billion by 2008.

It works by having an electronic chip inside the mobile phone which acts like a debit card. They are already being used in some top London nightclubs as a way to identify clients.

In Japan customers can buy many good such as railway tickets using a system of mobile phones.

If this form of payment takes off it will be interesting to see whether it is banks or mobile phone companies who are able to make the most profit out of the new scheme. Banks may find it more difficult to control compared to traditional forms of payment