The world’s leading maker of smartphones and the world’s top credit card company are teaming up. Visa says its NFC payment software will be built into all future Samsung smartphones. NFC stands for near field communication, and devices with NFC chips can communicate with other NFC-enabled devices directly, without a cellular network or Wi-Fi connection.
Many of the mobile payments technologies available to consumers today involve loading credit card numbers into smartphones and then tapping the smartphone to pay at NFC-enabled payment terminals (cash registers.) Credit card issuers are encouraging merchants to upgrade to these contactless terminals by changing the rules governing credit card fraud; within a few years stores without contactless terminals will be liable for fraud committed by people using counterfeit cards.
Visa and Samsung both have other mobile payments initiatives underway already. Both are part of Google Wallet, a mobile payments app for Android devices, and Visa cards can also be loaded into the Isis mobile wallet, Isis is a mobile payments joint venture launched by Verizon Wireless, AT&T and T-Mobile USA. So far, it has launched only in Salt Lake City and Austin.
No Samsung devices with embedded Visa software are on the market yet. The next flagship Samsung smartphone is expected in the middle of March, and that could be the debut phone for the embedded Visa payment solution, called payWave.
The Samsung-Visa alliance could give mobile payments a big boost in the U.S. and Europe, and could encourage other credit card issuers to follow suit. While Visa remains the world’s largest credit card company by transaction volume, China’s UnionPay now issues more plastic than Visa. UnionPay is working the China Mobile on a mobile payments solution.
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