NFC-enabled smartphone payments get Visa's stamp of approval
January 13, 2012
Mobile payments continue to gather momentum as a valid and reliable payment method. While critics have said the technology also brings new risks into the payment environment, some of the major card companies and others invested in mobile have been working to make the technology more legitimate and readily available.
Near field communication has consistently been referenced as the technology most likely to make this kind of transaction possible. Visa and Visa Europe recently announced they had certified several brands of NFC-enabled smartphones for use with the company's mobile application, Visa payWave. Select models from phone manufacturers Samsung, Research In Motion and LG Electronics all got the nod from the card issuer.
“In addition to issuing plastic magnetic stripe or chip-enabled payment cards, financial institutions can now consider offering their account holders a way to transform their smartphones into fully functional mobile payment devices,” stated Bill Gajda, the global head of mobile product for Visa.
Visa noted that the compliant products would install the app on a secure SIM card, thus enabling the short-range communications necessary to transfer payment data from a consumer's phone to the merchant's contactless payment terminal.
Nick Holland, a senior analyst with Yankee Group, issued a statement naming Visa's announcement as another step on the way to widespread adoption of NFC as the mobile payment standard. He added that NFC-based transactions were poised to see significant growth in the coming years, jumping from the $27 million volume in 2010 to $40 billion in 2014.
However, technology developers have recently announced a way for consumers and businesses to equip their mobile devices with NFC even if they don't have a specially manufactured smartphone or tablet computer. Wall Street Daily reports that DeviceFidelity and SpringCard have partnered to create "moneto," a microSD card that can communicate with NFC systems, making smartphones "NFC capable" for approximately $30.
The news source notes that this card could be the driving force that finally makes NFC mainstream in the U.S., even if not all smartphones carry the microSD slot. A benefit from the NFC chips is that the information stored on them is encrypted and are often laser and tamper resistant, the Daily says.
"As this breakthrough mobile wallet launches in the United States, it not only makes mobile payments available to iPhone users for the first time but it also opens the door for consumers to adopt NFC while pushing mobile commerce forward," Deepak Jain, DeviceFidelity's president and CEO, told the news outlet.
