Visa: Near Field Communications

Posted by Sam Churchill on

Visa has been demonstrating its PayWave technology at the Mobile World Congress, which lets any smartphone user convert a handset into an e-wallet, says the Washington Post. Visa’s Micro Tag, in your keychain or a microSD card, eliminates the need to swipe a card or enter a PIN. It’s done automatically when in close proximity (1-2 inches) to a secure reader.

Visa is planning to launch a contactless payment system for mobile phones using a microSD card. New Windows smartphones produced by Nokia may support Near Field Communication. Visa will have a “special plastic skin” for Apple iPhone users.

Nokia is still expected to make good on its pledge to put NFC in all new Symbian phones it introduces this year. Nokia expects shipment of 150 million more Symbian smartphones, projected over the next two years or so. There have been 200 million sold to date. The first Symbian phone to support NFC, the C7, shipped with an NFC chip inside before the end of 2010.

Banks will hand out the microSD cards to customers, who will then download the PayWave app. At stores with the readers for contactless payments, customers will simply open the app, line up their phones with the reader and click or slide a button to pay.

Visa says it’s safer than using a traditional credit card, since the chip generates a unique authentication code for each transaction and doesn’t give stores your credit card number.

Nokia, the world’s largest maker of mobile phones, has pushed NFC adoption for years, though the technology has been slow to take off in the United States. Nokia says that from 2011 on, every Nokia smartphone will have NFC.

Last November, AT&T Mobility, Verizon Wireless, and T-Mobile announced the creation of a new mobile payments network, called ISIS that would use NFC. Former GE Capital executive Michael Abbott has been hired as Isis CEO. Isis’ initial focus will be on building a mobile payment network that utilizes mobile phones to make point-of-sale purchases.

In the summer of 2010, Visa launched wireless payment trials with four banks — JPMorgan Chase, Wells Fargo, US Bankcorp and Bank of America. That trial used technology from DeviceFidelity, which created cases for the iPhone 3G, 3GS and iPhone 4 that incorporate a microSD card using Visa’s In2Pay technology.

Apple’s service may be able to tap into user information already on file, including credit-card numbers, iTunes gift-card balance and bank data, said Richard Crone, who leads financial industry adviser Crone Consulting LLC in San Carlos, California.

That could make it an alternative to programs offered by such companies as Visa, MasterCard and EBay’s PayPal.

So far, only the Samsung’s Nexus S, in the United States, promoted by Google has NFC, but other phones and tablets are expected to have NFC soon.

Near Field Communication enables the exchange of data between devices over about 4 inches (10 centimeters). It combines the interface of a smartcard and a reader into a single device and communicates via magnetic field induction.

Two loop antennas are located within each other’s near field. The phone contains your identity, but the tag is just a magnetic loop. It doesn’t need batteries. It can be embedded in a poster or sticker, and can be stuck to menus or store windows. It’s like RF-ID, with a unique identity number, but doesn’t require a separate reader at the store (like a smartcard) to make a transaction. You just place your phone on the tag and press a button. NFC operates in the unlicensed ISM band at 13.56 MHz.

Your phone provides your identity and security. Of course you don’t want to loose your phone. The security issues may take some time to work their way through general public acceptance. NFC could be convenient. Mobile ticketing in public transport and mobile payment are envisioned, since NFC eliminates the need to punch in a PIN number. It just takes a second.

Google’s Near-Field Communication technology is currently available only on Samsung’s Nexus S phone, which runs Android and is being tested in Portland, Oregon.

As shipped, Android 2.3 Gingerbread only allows tag reading. This means that the Nexus S, the first Gingerbread handset, can only so far retrieve information from pre-programmed near field communication tags. But Google has promised that write functionality is on the way soon with some upcoming extensions to the SDK. An NFC development house in Argentina, Gibraltar, has unearthed the write tags.

For all of Google’s strengths, they have not been able to nail a payment processing system, observes TechCrunch. They have Google Checkout, but customers clearly prefer competitors like PayPal, which has about 90 million active credit card accounts. Apple, on the other hand, has over 100 million accounts set up with built-in credit card access. The main goal for Apple may be to get a piece of the $6.2 trillion Americans spend each year with credit cards.

Google’s Hotpot is new way for you and your friends to share recommendations on bars, restaurants, hotels in order to get personalized Google search results. It can work in conjunction with NFC embedded posters.

The Android rating widget or iPhone Places app on your phone enables that service. It may not be long before transactions are enabled, too.

Posted by Sam Churchill on Friday, February 18th, 2011 at 9:47 am .

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