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Is the smartphone about to transform the way we shop?.

Is the smartphone about to transform the way we shop?

Have you noticed how much harder it is getting to pay for things by cheque?

First major retailers like Marks & Spencer and Tesco started to refuse to take them. Then the big UK banks phased out the cheque-guarantee scheme. Now comes news that the some bank customers are no longer receiving new chequebooks automatically when their existing ones run out, but instead have to ask for them.

The banks don't like cheques partly because, at around £1 per transaction, they are costly to process. They point out that cheque usage has fallen dramatically in Britain - from its peak of around 2.4 billion in 1990 to around 1.4 billion in 2010. Cheques are now used for fewer than one in 25 purchases.

But charities, in particular, receive many of their personal donations in the form of cheques. Older people continue to make many of their regular payments by cheque. And they are still the most practical way for most of us to pay the milkman or plumber or to send a gift to a son, daughter or grandchild.

The Payments Council, which sets strategy for payments in the UK, has backtracked on plans to abolish cheques by October 2018. But in the meantime, the banks continue their search for workable alternatives.

A major reason for the decline of the personal cheque is the rise of payments by credit and debit card. Now, 45 years after the launch of Barclaycard in the UK, comes news that banks, credit-card companies, wireless-network operators and Silicon Valley businesses are exploring ways to use smartphones as a method of payment in place of the ubiquitous plastic.

Brad Stone and Olga Kharif report in the July 2011 issue of Bloomberg Businessweek that a single tap with a phone can not only deduct money from the purchaser's bank account, but also take into consideration any money-off coupons he or she may have accumulated, and add points under the retailer's loyalty scheme. This opens up the possibility that companies like Google could route deals to a person's cellphone at just the right time and place.

Eventually, say the authors, it may be possible for consumers to browse the store, find what they need and pay with their phones by accessing payment information stored securely on the web. The days of queuing to pay a cashier would then be over.

But would these advantages be significant enough to cause the new approach to payments to really catch on? In the end, consumers may decide that the privacy implications of allowing Google and its rivals to have so much more information on their shopping patterns is simply too high a price to pay for a few minutes saved at the till.

Already, another technological development is threatening to turn the oh-so-useful smartphone into a something potentially sinister.

In 2011 Elgan reports in Information Age on the emergence of a new class of 'app' that uses the microphone built into the mobile phone as a covert listening device.

One app detects when people are in the same room and can auto-generate spontaneous temporary social networks of people who are sharing the same experience. Another promotes social networking by listening to what the user is watching on television.

Now let's think about this; a mobile phone that can listen out to identify what shop we are in, who we are with and what we are thinking of buying, then relay the information to a central database that can examine our purchasing history and entice us to buy through money-off coupons or other individualised incentives.

Is this the acceptable face of shopping in the twenty-first century or simply the latest manifestation of the Big Brother society?