February 1st, 2011
02:16 AM GMT
Hong Kong, China (CNN) – Tech analysts in the U.S. are abuzz over predictions that the next generation of smart phones - including Apple's iPhone 5 - will be enabled with so-called cashless technology.
NFC - which stands for Near Field Communication - basically allows two devices to exchange data when they come within a few inches of each other. In Apple's case, it would enable iPhone5 users to simply “wave and pay.”
It's actually not a new technology. Samsung Electronics is already experimenting with NFC in mobile devices in certain markets. And some cities in Asia and Europe have embraced cashless technology for transportation, such as London’s Oyster card, for years.
Here in Hong Kong “wave and pay” has been popular for more than a decade, long enough for it to have become part of daily life.
About 95% of Hong Kong’s 7 million-plus residents use something called the Octopus Card. It can be used not only to swipe and pay on buses, taxis and ferries but at a growing number of retail and service outlets - Octopus says it has 3,000 service partners - including supermarkets, restaurants and gift shops. It can also be used instead of cash at certain hospitals and movie theaters - some even use it to access their apartment buildings.
The tiny chip inside the Octopus card is where the magic happens, and it can be embedded in a variety of products, like key chains, ornaments and watches.
For Hong Kongers, it's old hat. But I just moved here from the U.S., and I'll admit the idea of using a watch to catch the train to work sounds pretty dang cool.
I wanted to see how far I could get in a wave-and-pay world, so I left my wallet and cash at home and spent an entire day using only a prepaid Octopus card in the form of a wristwatch.
For the most part, it worked like a charm. I caught the train to work, bought a Coke from a vending machine, grabbed a coffee from Starbucks, bought groceries, grabbed noodles for lunch, rode the tram home and even had my snapshot taken at a train-station photo booth. Not once did I exchange a single bill or coin.
However, using the watch was tricky at times. It failed to "beep" on first swipe at several different Octopus readers during my adventure. At the photo booth for instance, the watch took about a dozen tries before it was happy.
And what about security and privacy concerns? I mean, do you really want your mobile device keeping tabs on your daily buying habits? When and where you travel, which stores you shop at? In 2010 Octopus faced widespread public backlash when a data leak revealed the company had sold customer data to insurance companies. The embarrassment led a top Octopus executive to step down and the company to promise not to sell customer data in the future.
On the other hand, Hong Kong police have used data recorded by Octopus cards to solve several crimes in the past several years, including a murder case last summer.
As usual, Apple is keeping tight-lipped about its plans for the iPhone. Even if the next generation of smartphones allow for wave and pay, it remains unclear how far the technology will catch on in the U.S. and the rest of the world.
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