Pay-by-phone options becoming a good call

People across the country use their smart phones to check baseball scores, get directions, buy digital music, play online backgammon and more -- including, at least once in awhile, talking.

Few people in the United States, however, have paid for a cup of coffee, or a couch, with their phones.

But that is changing.

Technology companies and corporations are toiling to turn the ubiquitous devices into wallets, giving consumers the choice of wielding their phones -- instead of their credit cards, checkbooks or cash -- to make purchases.

"My guess is in three to five years you don't carry cash; you only carry a phone," said David Corsun, director of the University of Denver's School of Hotel, Restaurant and Tourism Management.

At Denver University this fall, students for the first time will be able to use their phones at the university's coffee shop, Beans, a development he called "the first wave of that movement."

Most experts don't think the wallet is poised to vanish tomorrow. The country's complex network of banks -- everyone has a different one -- complicates pay-by-phone commerce, even though the technology for it exists. But in countries with a more streamlined banking infrastructure, such as South Korea, the practice already thrives.

And it has started.

In Boulder, people who install on their phones an application from Mocapay, a Denver-based technology company, can pay for doughnuts, gas and everything else at one of the city's ShortStop convenience stores.

At Starbucks locations in Silicon Valley and Seattle -- and at Starbucks within Target stores nationwide -- cappuccino cravers just need a Starbucks app to walk away with that skinny cup of java.

"We are moving from an era when apps were cute and cuddly, something to kill time, to something that is useful, making your life easier," said Patrick Mork, chief marketing officer at GetJar, a Silicon Valley app company. "That's why my phone is so important to me. It's not just for talking to people -- that's what I do the least with it."

For now, most pay-by- phone schemes are digital variations on gift cards -- that is, users transfer money into their mobile app, which keeps track of the account.

"People are doing banking, checking their bills, their account status, moving funds around," said Seattle-based ABI Research analyst Neil Strother. "These are precursors towards a world where more mobile commerce is available."

Among recent developments:

• Some municipalities permit people to pay their parking tickets via mobile phone.

• A recent study showed that 19 percent of people ages 18 to 29 have made charitable donations by text message.

• A test program in New York has customers install chips in their phones that, when used at checkout counters, transmit back account information.

• PayPal Mobile lets people exchange money through their mobile phones by bumping phones together.

• One of the developers of Twitter is behind Square, a company that has created a small device that attaches to smart phones. The device lets people swipe credit cards against the phone.

"The gamut of things that could be impacted [by Square] are phenomenal," said Joe Pezzillo, co-founder of the Boulder technology company Push.IO. "You could use credit cards at garage sales. You're out with your friends and settling up the bill, and somebody doesn't have cash. You say fine, I'll swipe your card. I can take $20 from your credit card."

For the near future, advances in mobile payment will likely remain in "closed-loop systems," where individual stores adopt a technology and consumers agree to use it.

But in the future, it's likely that phones will become as accepted as credit cards and cash.