Here is my idea for a mobile phone payment system that doesn’t require extra equipment or crazy wireless work.

1. You have an application on both phones
2. The seller inputs the amount and it generates a barcode that contains the payment information
3. The buyer scans the barcode with his phone, loading the payment information
4. Buyer clicks pay
5. Money is transferred
6. Seller receives a notification on his phone

By putting the pay button in the hands of the buyer, this eliminates the chance that the seller can steal your credit card information. The seller will still get confirmation from a trusted third party that the money has been transferred. Ideally, there will be some sort of authentication done on the buyer’s phone.

If prices are set in advance, it wouldn’t even be necessary for the seller to generate a barcode on his phone. Imagine you want to buy a hotdog from a street vendor but you don’t have cash. Instead of just having a sign with prices, the vendor might have a sign with prices and a pre-generated barcode. You scan the barcode on the sign, press pay, and a few seconds later the vendor gets a message on his phone confirming your payment. Likewise, a barcode could be printed on your bill at a restaurant (to avoid the server disappearing with your credit card). Or how about an internet-enabled soda machine that displays a barcode and lets you pay with your phone?

Note: the mockup above shows an Android phone, but any phone with a decent camera should work. It’s also not very pretty, I’d expect anyone who steals my idea to make it look nicer.