Cash call

About Technology –

Paypal recently launched a new money app for the iPhone

Every morning millions of people repeat their "keys, wallet, phone" mantra before leaving home for work to make sure they have not forgotten anything.

But will the day come when we can strike "wallet" off the list because the mobile phone will be used for all our payments?

The key development in payments technology is the ability of mobiles to receive payments, according to Dave Birch, director of Consult Hyperion.

So how will these payments work?

App appeal

Whatever people’s views on the future of cash and cheques, there is an inevitability about the increased use of mobiles to make payments.

"Cash is unlikely ever to disappear, but its decline may even accelerate as mobile payments come in," says a report by the Payments Council, which oversees payments strategy and has a membership that includes banks and other payment system providers.

"By 2050, using cash could well be a minority activity, much more the preserve of informal transactions."

A number of niche businesses have been developing systems that operate safely, conveniently and cheaply for mobile owners.

One of the first mass-marketed operations is the "Send Money" app for the iPhone which was launched recently by Paypal.

This allows two owners of iPhones to "bump" their phones together – by tapping them against each other physically – in order to make a connection and send money to each other.

Mobiles are already being used for some common payments

The bumping may be a bit of a gimmick, but the technology that lies behind it signals how future payments may be made.

Having accepted a connection which flashes up on the screen, one person can send another some money from their bank account or an account they have set up with Paypal.

Paypal effectively is the middle man – providing a holding account for each so the individuals do not have to exchange their bank details.

Its profit comes from charging some users, including business users. For example, if the sender uses a credit or debit card for the payment, there is a fee of 3.4% of the payment plus 20p. The sender can choose whether to pay the fee or pass it on to the recipient.

The payment limit is $2,500 (£1,621) but Paypal expects the app to be used for small transactions. About one million people have downloaded it worldwide.

Security

Paypal believes that its model is a secure one, as people do not exchange bank details. To make a connection, the iPhone user will have to enter an identifying feature or a Pin.

But this remains a major concern to those still uneasy with automated payments rather than paying in person.

Fraud losses on UK credit and debit cards totalled £440m in 2009 – a drop of 28% compared with the previous year, the latest figures from the UK Cards Association show.

But the number of "phishing" attacks rose by 16% in the same period. This is when fraudsters trick people into entering their personal details on a website or in an e-mail.

Fraudsters tend to follow trends, so expect them to be concentrating on ways to raid accounts from mobile phones.

Company directors and business owners, as well as the young – all people most likely to keep up with the latest technology – are among the most likely to be defrauded, a recent report by Experian found.

In day-to-day life, our phones are becoming a more common factor in payments. Parking fees, for example, are being taken on the phone rather than in cash.

But whether we embrace it to the extent of moving towards a cashless society remains to be seen.

And the success of mobile payments could be the key to if, or when, the chequebook is finally phased out.

About Technology – Cash call

About Technology –

Splashing cash on fancy gadgets can often be seen as a luxury especially during an economic downturn – but can we save money by upgrading our existing tech rather than investing in brand new gear?

Upgrading your laptop can be a scary experience

The answer is that it depends on the gadget in question.

For instance, there is only a limited amount you can do with a laptop. You can replace the hard drive and maybe upgrade the Ram. The former will give you more space to store stuff and the later may make the machine a bit speedier.

The rest is tricky – you cannot really upgrade the graphics card because it is welded in and getting to the processor is very difficult indeed.

An easier way to upgrade your laptop without fuss is to add an external hard drive, or even an external numeric keypad.

Scary experience

Paul Trotter, editor of PC Advisor says: "Upgrading your laptop can be a fairly scary experience the first time you do it.

"You may first of all void the warranty, but it’s likely that if it is a slower, older system your warranty is already expired.

"If you are replacing something like Ram you need to make sure it’s the correct Ram otherwise your laptop won’t recognise it.

"Fortunately there are some websites that can do the trick for you – Crucial.com has a memory advisor, as does Kingston.

"If you don’t want to open up the laptop you can speed things up a little bit by looking at the software installed, removing programs you don’t use and using PC clean up tools.

PC clean-up tools allow you to speed up an old computer

"There is software that you can download such as C Cleaner which will remove all the unwanted software and bits and pieces on your hard drive and speed things up."

Free software

There is lots of free software online offering many alternatives to paid programs.

It is possible to find free anti-virus (avg.com), collaboration tools (mindmeister.com), project management (nozbe), file-transfer (Filezilla), blogging (wordpress) and media players (videolan).

And on the subject of software that can save you money, you could use your internet connection to speak to people on the other side of the planet rather than via the old-fashioned phone.

The technology in question is called Voice Over IP (VoIP) – the "IP" stands for Internet Protocol. Many of the services that use it are free if users call another person on that service. That can save quite a bit of money if you regularly have long conversations with friends or family abroad.

Going green

If you are watching the pennies, you will be pleased to know that your car GPS might soon help you keep an eye on your bank balance as well as the road.

One new system has an alternative eco mode which claims to save money and the environment by telling you when you are driving inefficiently.

The big advantage of this is the moment you start using it, you will be greener.

The maker Vexia says it will take six months to pay for itself.

Some cars, like the Honda Insight hybrid already have an eco-mode built in.

The display helps you by glowing green if you drive ecologically. For short journeys in the city, this car could save you a bundle.

Watch Click on BBC News Channel, Saturday 5 September at 11.30 (BST).

Do you have any money saving tips you would like to share with us?

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About Technology – Cash call

About Technology –

Facebook now has more than 175 million registered users

It remains the elephant in the room. Or, more to the point, the “fail whale” in the room.

Just how are social networks, with their millions upon millions of users, going to make money?

The profits should be rolling in: Twitter, which has been catapulted into the public-eye thanks to Stephen Fry and Barack Obama, is currently surviving on multi-million dollar handouts. And Facebook, the global force in social networking, has yet to harness its huge user base to bring in any significant revenue.

Many believe answer may lie in advertising.

Unlike traditional mediums, which were built on the mantra of getting as many eyes on a product as possible, social networking instead allows for targeted ads aimed at ages, interests, hobbies and so on.

Techlightenment, a company specialising in social media advertising, ran the online campaign for the film Tropic Thunder. The firm’s head of media, Richard Ireland, says social media allowed them to not only publicise the film, but also advertise directly at certain types of people.

“We could easily display our ad for people who say they are fans of Ben Stiller,” he says. “Or Dodgeball, Jack Black etc. It’s really about making it relevant.”

He says when adverts are targeted to particular people, the number of users that click the advert goes through the roof.

Other industries, says Mr Ireland, can use more subtle approaches to find the right audience.

“Nobody puts on their profile that they love credit cards, but what they do put on their profile is ‘I love shopping’. That demonstrates the power of the information networks have at their disposal.”

He says advertising agencies, and perhaps even the social networks themselves, have yet to adapt to this new form of reaching a specific audience.

But where do you draw the line on what personal information advertisers have access to? The safety and privacy of user data is a controversial issue. Just ask Facebook: Last week it tweaked its terms of service, causing a huge backlash from members. Days later, it bowed to pressure and changed them back again and have now handed over the way it handles personal data over to its users.

It is difficult to imagine how Facebook could implement a change that drives revenues while retaining users. MySpace and Bebo, on the other hand, have adopted a much more aggressive advertising strategy.

Alex Burmaster, communications director at Nielsen Online, says MySpace resembles a more traditional form of advertising, with the homepage often transformed for various promotions much like a classic billboard ad. He also argues that MySpace users are more accustomed, and more accepting, of adverts.

“Their site is a lot about music and entertainment. So if they see music and entertainment advertised on there it’s part of the experience. For Facebook, it’s a Catch 22: The more targeted the ad technology, the more attractive it is to advertisers, but it’s more freaky for the users.

“When Facebook get the technology right, it will make a massive difference. The potential is absolutely enormous.”

Relative newcomer Twitter potentially faces a trickier battle. Like Facebook, it attracts an older user base, but it doesn’t have as much personal and, crucially, sellable data.

Mark Zuckerberg started Facebook to help students connect

Twitter co-founder Biz Stone recently blogged that it is looking into building “revenue-generating products”. Whether that is ad-funded or subscription based – like the very successful photo-sharing site Flickr – remains to be seen.

Popularity is no guarantee of success, of course. Friends Reunited, pioneers of social networking in the UK, is rumoured to be going up for sale for £20 million. A fraction of the £175 million ITV paid for it three years ago.

Like all businesses, social networks will soon have to confront the balance sheets. However, if they can weather the economic storm, the future could be extremely prosperous. The real social networking boom may still happen.