Visa turns mobile phones into credit cards

Visa, the electronic payment network, will launch its first commercial mobile phone-based contactless payment system in Malaysia on Thursday.

The rollout follows a series of successful trials over the past two years involving mobile phones based on the Near Field Communications (NFC) contactless technology which enables users to pay for goods and services simply by “waving” their handset close to a “reader”. Visa already make use of the same technology in its payWave contactless credit or debit cards.

In Japan, more than 40m contactless “osaifu-keitai”, or “wallet phones”, have been sold since mid-2004. However, these handsets are based on Sony’s proprietary FeliCa technology rather than the NFC industry standard which was agreed a few years ago and is expected to become popular throughout the world.

“We believe that Visa’s NFC mobile payment launch in Malaysia signals a tipping point for the payments industry globally as we move from mobile payment pilots to commercial availability,” said Elizabeth Buse, Global Head of Product at Visa.

For the launch in Malaysia, Nokia will supply its Nokia 6212 NFC-enabled handset. Maybank, Malaysia’s largest bank, and Maxis, the largest mobile network operator in the south Asian nation with more than 11m subscribers, are the other partners.

The service will only be available to Maybank’s Visa credit cardholders who are also pre-paid Maxis subscribers.

An initial 3,000 Nokia handsets will go on sale this month and Maybank Visa card holders will be able to complete transactions by “waving” their devices within a few inches of special point-of-sale readers already installed at more than 1,800 merchant outlets, mostly around the capital, Kuala Lumpur. Visa says that payments made with NFC technology are highly secure.

Like other electronic payment network operators Visa is keen to tap the potential of increasingly sophisticated and widespread mobile handsets as a platform for mobile banking. The launch is a key part of Visa efforts to “move electronic payments beyond the card to a vast new market of 4bn mobile subscribers globally,” the company said.

The NFC chip embedded in the Nokia 6214 device will also power a number of additional functions, including a contactless transit application that enables Malaysian commuters to pay for charges while using metropolitan transit systems, bus terminals, highway toll gates and car park facilities at more than 3,000 contactless payment touch points throughout Malaysia. Maxis has branded these mobile payment services under the name Maxis FastTap.

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