Let NFC Smartphone Technology Give Your Wallet The Boot
Tuesday, June 14, 2011: Issue #1534How often have you left home and forgotten your wallet? Or had to get a credit card replaced because a stranger lifted your number at a restaurant? As a frequent traveler, I’ve had both happen to me on numerous occasions.
With plastic credit cards fast becoming as obsolete as paper money – Visa, the giant credit card issuer, has created an amazing new technology it calls “payWave” that enables you to leave your wallet, cash and credit cards home. Easily allowing consumers to turn their smartphones into electronic wallets.
PayWave uses something called near field communication (NFC). NFC is a short-range, wireless technology that allows secure communications between two proximate devices. You simply bring your smartphone within a couple of inches of the transaction terminal, and voila, a transaction is complete.
Despite the obvious benefits, the e-wallet industry has had a slow, rocky start.
One one side, the mobilephone users saw no need to incorporate NFC into their devices. On the other side, retailers wouldn’t install mobile payment readers if consumers didn’t own phones that could use the technology.It’s been a bit of a chicken-and-egg thing…
GSMA Issues Call to Arms to Encourage NFC Devices
Back in 2008, GSMA challenged device manufacturers to begin embedding NFC technology into their devices. Fast-forward to 2011, and the next generation smartphones (still a year or two away) will all have NFC capability.
But Visa didn’t wait. It provided a way to use today’s smartphones to take advantage of NFC-enabled vendors. It involves inserting a special micro-SD (secure digital) card into the slots on some phones. For the iPhone 3 and 4, Apple developed a special plastic skin to hold the chip.
Now, users simply download Visa’s special app, and they can begin NFC transactions. So far, 11 banks, including Wells Fargo, Bank of America, Chase and U.S. Bank, all offer the payWave technology.
MasterCard’s PayPass and Amex’s Express Pay are similar e-wallet systems using NFC technology, and all three are compatible with the terminal readers.
Bill Gajda, global head of Visa Mobile, spoke to CNET at the Mobile World Congress earlier this year in Barcelona, Spain. He believes the transition to cardless transactions is well underway. “NFC technology will take off in 2011,” said Gajda. “The move from leather wallets to mobile wallets will come this year.
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“The move from leather wallets to mobile wallets will come this year.” So far, vendors include CVS stores, McDonalds and 10000 taxicabs in New York City. In San Francisco, you can use your e-wallet to buy your groceries at Whole Foods,
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