New US Mobile Payment System

A Silicon Valley company has created a mobile payment system called FaceCash that it hopes will one day displace credit cards.

Here’s how it works: You can download the FaceCash application on any leading smartphone — it will be available on iPhone, BlackBerry or Android phones beginning next week. Then you type in your bank account information, Social Security number, and driver’s licence number, and upload your picture. That’s it. You can now use your phone to make pretty much any in-person transaction, whether at a restaurant or at a grocery store — as long as the merchant has signed up for the service. To accept your payment, the merchant simply scans the FaceCash barcode on your phone with a scanner, and your picture will pop up on their computer screen — which helps them avoid fraud. They then approve your payment.

FaceCash has a tough road ahead of it in the short term, because it needs to sign up lots of customers and merchants before it can be useful to either side. On the flip side, if it devises some smart marketing tactics, and cuts deals with banks so that it can become a credit instrument as well as a debit card, this company has a very nice chance. And we should wish it well, because it offers a more open, useful, and inexpensive technology than the gouging credit card companies.