Electronic point-of-sale mobile payments at retail locations aren?t quite ready for prime-time ? but they?re getting closer.
The latest heavy-hitter to enter the fray is Visa, the ubiquitous financial services company, which has announced plans for a digital wallet based on Near Field Communication, or NFC, technology.
Visa?s announcement accelerates the all-out race over digital payments. Major companies, from financial institutions to telecom giants to internet firms, all recognize the opportunity associated with the realization of a long-standing dream: the ability for consumers to pay for purchases simply by waving their phone near a cash register.
?The widespread adoption of internet and mobile technology is changing the way people connect and transact across the globe, so we?re focused on delivering locally-tailored payments products and services,? Visa chairman and CEO Joseph W. Saunders said in a statement accompanying the announcement last week.
In addition to point-of-sale digital payments, the new Visa system promises greatly simplified, one-click web shopping, as well as an open platform that will let users consolidate accounts from a variety of financial institutions, according to the company.
Jennifer Schulz, the veteran Visa executive who is in charge of innovation at the company, told Wired.com that the company increasingly views itself as a technology company that is enabling commerce.
?When you think about what?s impacting commerce, you have one overarching trend: the continued adoption of electronic forms of payments,? Schulz said. ?People are migrating away from cash and check and using electronic capabilities to make their purchases, to transfer value between two entities and send money to friends.?
?We?ve seen the use of and ubiquity of mobile devices really driving consumer behavior and driving adoption of electronic forms of payments,? Schulz added.
With the new system, slated to be rolled out this fall, Visa is making on a bet on NFC technology, which many industry observers believe will become the standard format for mobile payments. NFC tech allows the type of secure, short-range communications required to make mobile point-of-sale payments feasible.
Google reportedly plans to begin testing its own mobile-payments system within the next few months, and will install thousands of special cash-register systems from VeriFone Systems, which uses NFC, at merchant locations in New York and San Francisco.
At present only a handful of phones support NFC, including Google?s Android-based Nexus S, which is produced by Samsung. There has been some chatter that Apple would incorporate NFC into the next-generation iPhone 5, but Bernstein Research analyst Toni Sacconaghi recently cast some doubt on that notion, according to AllThingsD, in part because the NFC infrastructure roll-out remains in its infancy.
?We do not expect the iPhone 5 to feature an NFC-based payments solution, and instead expect Apple will evaluate and come to market with partners or a complete solution later, perhaps when NFC infrastructure is more established,? Sacconaghi wrote in a note to clients.
But there is little doubt that Apple is experimenting with NFC, as Sarah Clark of SJB Research and Near Field Communications World, told Wired.com recently.
?Apple is undeniably working on this, and they have some very interesting patent applications that show that they are serious about it,? Clark said. ?If Apple puts NFC into the iPhone, that?s going to be Day One of the commercial marketplace for NFC technology.?
As for Visa, Schulz said the company has already lined up some powerful retail banking partners including US Bank, Royal Bank of Canada and PNC Bank. The company is expected to announce additional bank partners in the coming months.
?Over time, we think that consumers will adopt the mobile phone to be the payment method of choice,? Schulz said, though she added that people won?t completely abandon plastic credit cards.
Image: Visa
Source: http://www.wired.com/epicenter/2011/05/visa-digital-wallet-nfc/
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