The HSBC bank launched in Brazil a service called M-cash, which enables its clients to purchase products on retail stores with the mobile phone or through the Internet. The bank commented that as much as 15 million clients could start using the new technology, and there is a potential for growth if you consider that Brazil counts more than 90 million mobile subscribers.

The process is pretty simple and secure (the bank said that $4 million was invested on the authentication system), once the payment for a certain product is required a central network will call the mobile of the client asking for the password, and the purchase should be completed in less than 30 seconds. The technology is compatible with a wide range of standards including GSM, CDMA and TDMA for mobile telecommunications and SMS, WAP, USSD and IP/XML for data applications.

Brazil is obviously not the first country to experiment with mobile phones for financial transactions, some Asian countries are already employing such technologies extensively. NTT DoCoMo, in Japan, is using the Felica chips to enable financial operations from its mobile handsets. Contrary to the Brazilian technology the Felica cards operate under a contacless fashion, the user just needs to place the mobile phone close to the reader to enable the payment. In Europe vending machines already accept payment through SMS (Short Text Message) and many countries are planning to extend the services to traditional retail stores, train stations and the like.

The mobile phone has being much more than a communication device for a long time, current handsets can already play music, take photographs, receive emails, navigate the Internet, record video and the list goes on. How far will mobile phones go in our economy?

Reference: M-Cash Official Site