Losing your Wallet

Technology has evolved over the years, giving us new and faster ways to pay for things. Once there was just hand written promises to pay, which turned in to cash and cheques. Then came the credit card in the 1960's and chip and pin in 2006. The next step is a contactless future, where we no longer carry cards or cash at all. Wallets will be replaced by something we carry around anyway: our mobile phones. Nick Gigurtisis a student at Queen Mary, University of London explains.

We've all probably used a contactless card in one form or another. The Oyster card, which has made traveling on the London underground much more convenient, is one example, as are some office ID cards. Soon, your mobile will be able to do both of these things, as well as be your airline ticket, health monitor, and much more. This is all thanks to something called 'Near Field Communication'.

Near Field Communication (NFC), is a newer way for gadgets to communicate - over very short distances of a few centimeters. Wave one past another and they talk to each other. For them to do this one needs to be a special reader/writer and the other (the mobile) an NFC tag. These tags are very small compared to the reader: about the size of a penny. They are simple because their sole purpose is to hold and wirelessly communicate a small amount of information they can store.

The reader and chip use a technology called 'inductive coupling' to communicate. Each tag chip has a coil of wire in it that acts as its antenna. When this passes into the small magnetic field created by the NFC reader, a current is generated in the coil. This gives it the power to start the communication between the two.

For a mobile phone or other gadget to be turned into a wallet it first needs an NFC tag to be included in it. Then a wallet app is needed for you to interact with. It holds your account details, gives you a way to approve payments and so on. You may also need the phone to have a secure chip to ensure the communication really is secure - given NFC chips themselves aren't. When the tag is triggered its storage space becomes the link from the smart phone to a bank via the reader.

With new technology comes new risks, and NFC wallets are no different. One of the main concerns centers on its wireless nature. It may enable people to eavesdrop on your transactions - which means someone could possibly even take over your account. That's why NFC only has a small range: so any attacker would need to have an antenna very close to your phone to intercept the signal. That would look rather suspicious, so it's not too great a risk, but still possible. Right now, if you lose your mobile the big risk is someone getting hold of your contacts or email account and masquerading as you. With NFC, because it turns your phone into your wallet, any thief would be able to use your stolen phone like a debit card and buy things with it. This problem will have to be solved before phones become the way people pay for everything.

For the immediate future wallets are probably safe, but it may not for long before you lose yours for good.