So at that point you end up with identical functionality to a credit card, except in a gimmicky package that's much more expensive to replace if lost or stolen,

So at that point you end up with identical functionality to a credit card, except in a gimmicky package that's much more expensive to replace if lost or stolen, and much more valuable to the individual who obtains it. What's nice with a simple card is it has no intrinsic value; it's just a cheap token for authentication. Sure, something extra you could do with a phone would be wrapping the payment system behind some sort of on-phone authentication before the phone "allows" you to use it, but then that's only as secure as the phone's debug access, so ultimately you end up with a bank-side activation/pin scheme, which puts you back at square one all over again. To prevent the phone from getting a signal, put it inside a faraday cage (wrap it in aluminum foil).