The good old credit card – what is its future? Will we still have to look around for the best rates on credit cards or will lenders instantly offer the best rates in line with our spending habits? Will we even still use credit cards to pay for goods and services?

Technology is moving on at such a rapid pace that, just as credit cards looked like signalling the end of cash transactions, the smartphone now looks like it could realistically replace the credit card.

This is due, in no small part, to Google has launching a new payments system called Google Wallet. Good news for techno junkies. The phone-based digital wallet uses NFC technology and is believed to have been tested sufficiently to go into a mainstream trial.

NFC or near-field communication technology is an evolution of radio-frequency identification (RFID) technology. It has been in use for many years in the London Underground where Oyster cards were merely tapped on a pad to pay for a trip. NFC extends the capabilities of RFID and should do more than just make payments but it is still compatible with the older technology.

Who is it aimed at? To begin with, the wallet is only available for those who use Nexus S 4G but it will probably also be available for the iPhone 5 and by 2014, one in five smart phones will have NFC. So, don’t cut up your credit card yet. Only with the Nexus S 4G, only on the Sprint network and only in the US – that is where the service will kick off. Mastercard as well as Visa credit cards will use the technology.

What are the advantages? The apparatus stores the details of your credit card and you will make payment by just flashing your phone at the sensor. Stores and shopping outlets will have to have the NFC reader devices / technology to begin with. Lines will become shorter and payment faster and more secure.

It will reduce the need to carry a credit card or a number of cards; you will have only one apparatus with which to conduct payment, use for communication and connect to the internet.

Will it be secure? With credit card fraud on the increase, the first question on people’s minds will be how safe and secure the technology is. Would someone be able to walk around with a reader device and cheat people out of their hard earned cash? NFC has a short range and cannot be scanned from a distance. It will be necessary to touch the apparatus with the reader to do a transaction. There would also be a transaction limit.

Would people still prefer to use credit cards? Not all people will have the new phones with the NFC technology nor would everyone be able to afford it. Credit cards will therefore still be in use for the foreseeable future.

Stephanie Tilenius, Vice President of Commerce and Payments at Google describes the new technology as

“mobile commerce – one that creates a rich shopping experience for consumers and merchants alike”.

The Chinese have an old saying – “may you live in interesting times”. Well, times are getting more and more interesting as technology advances.

The NFC ‘tap and pay’ technology and Google Wallet will certainly make life a lot easier in the future.

This was a guest post by Les Roberts, a tech lover, freelance journalist and writer on credit cards at moneysupermarket.

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Raju is the founder-editor of Technology Personalized. A proud geek and an Internet freak, who is also a social networking enthusiast. You can follow him on Facebook and on Twitter. Mail Raju PP. Follow rajupp