For almost as long as Americans have been hearing about jetpacks and picture phones, they have been hearing that money -- bills, coins and plastic cards -- might cease to exist, or at least become a novelty.
Instead of leather wallets, consumers could soon carry virtual  wallets, with their credit card and bank information stored on remote computers accessible everywhere and anytime. They could have access to them whenever they wanted to buy something, whether on the Web, on cell phones or at cash registers.
With a new cell phone application called ShopSavvy, for instance, a shopper can use the phone's camera to scan an item's bar code in a store to see if it is available for a lower price online. If so, a shopper can purchase it with one click if credit card and shipping information have already been entered on the Web site of a service called PayPal.
"What we're trying to do and what we think is very important is to displace the use of cash or checks," said Scott Thompson, president of PayPal, which is a leader in digitizing money. "We'll just have one wallet, and it lives in the cloud ."
The way that consumers pay for things has been transformed only a few times. Coins replaced bartering, paper bills mostly replaced coins and bank drafts and checks developed as an alternative to cash. In the 1950s, the credit card was introduced, and today, Americans pay for more on plastic than they do with cash. Some airlines and restaurants no longer even accept cash. The evolution to digital money that is accessed over the Web is under way, led by companies like PayPal, MasterCard and Visa, as well as start-ups and retailers.
"It just keeps getting more and more convenient to get access to your money and to transfer it to someone else," said Lawrence H. White, a professor of economics at George Mason University in Virginia who specializes in the history of money. "When everyone has a cell phone, why reach into your wallet?"
During the dot-com bubble, several companies tried and failed to come up with Web-based, cash alternatives. Flooz and Beenz tried to create a virtual currency, for example, and a company called CyberCash developed an unsuccessful service for micropayments on the Web. (continued...)
© 2010 International Herald Tribune under contract with MarketWatch. All rights reserved.
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