Pay Fast--With No Cash

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If you lose your wand or RFID cell phone, you just report it stolen or missing, and FreedomPay or 2Scoot will deactivate it and issue a new one with a new code. And those who use the electronic-purse system usually keep only two-figure sums of money in them. "It's not like you're gonna buy a 1948 roadster with a $99 account," says Jim Forbes, an analyst for consulting firm IDG, based in San Mateo, Calif.

Fast-food restaurateurs are especially excited by m-commerce, which promises to inject more "fast" into their business while helping reduce employee theft and errors in making change. End-of-shift reconciliation is automatic, so there's no clumsy comparing of credit-card receipts with the register. "People can't sift through the trash and find your credit-card number," points out Joe Ely, technical officer for 2Scoot. "And they can't ring up $7 on the register, put $27 on the credit-card machine and pocket the $20." Installation of an RFID reader costs about $300--about half the cost of a reader for credit cards. And customers get the wands or tags free.

Parents who want their lunch money to go for food--as opposed to video games, cigarettes or alcohol--are also finding RFID wands a useful tool. In Boise, McDonald's manager Dick Darmody says one of his first customers for RFID wands was a woman with three sons--12, 14 and 16. "She was always giving her sons money for lunch, and they were always losing it," he says. "She liked the idea that they could use the wand only at McDonald's." Darmody also sees the wands as a tool to build customer loyalty--say, by offering customers a free dessert or a $5 credit when they spend $20. FreedomPay and 2Scoot do not sell their information, but they do tell retailers whether you have a penchant for Big Macs over cheeseburgers, or chocolate shakes over vanilla.

McDonald's hopes to accept RFID wands nationwide as early as next year. Canteen has decided to convert all its vending machines after watching sales shoot up more than 40% in its North Carolina test. IBM technology guru Michael Karasick notes that while "the hype level for m-commerce has gone way down," the the technology still promises to change retailing "profoundly."