Visa Credit Card On A Phone

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Visa is rolling out a cellphone payment system that is more than sticker-thin. The service is currently available only in Malaysia, but it will be expanded to other countries in coming years.

Like some phone payment schemes already used in Japan, the Visa service uses a chip on the phone to communicate with a payment terminal. But the latest version is based on a global standard for phones and telephones called near field communications.

Here’s how it works:

You buy a phone with the appropriate near field communication chip in it, such as the Nokia 6212. You connect the phone over the mobile Internet to your bank to set up your payment account. When you want to buy something, you wave the phone within 4 cm of the terminal at the merchant. The transaction proceeds as if you have swiped your magnetic stripe card in the terminal. This works exactly the same as the R.F.I.D. payment systems used a bit in the United States that put tags in credit cards or on little key fobs. Indeed, the terminals you now see at fast food shops and drug stores that take the R.F.I.D. cards can also read account numbers on the new sort of phones.

But the chip on the phone adds a few features that may make buying things a bit more secure and a bit more convenient than using the existing R.F.I.D. tags or the phone stickers.

If you want, you can lock the payment capability of your phone with a password, so a phone thief can’t also go on a spending spree. Moreover, even if you don’t lock the card number on the phone, you can call your bank, which can disable it remotely.

As for convenience, the technology standard will ultimately allow you to load multiple accounts onto one phone. The program in Malaysia allows phones to be used to pay for parking and public transit fares through a separate account. Eventually, the system will allow credit and debit card accounts from multiple providers and payment brands. You need to run an application on your phone to switch the default account that is charged when you swipe the phone over a terminal.

And of course, the Visa service might appeal to people who simply think it is easier to pull out their phone at the checkout terminal instead of the card in their wallet. (Does this appeal to you? Let me know in the comments below.)

While the near field communications standard allows for the two-way transfer of information, the payment application is one-way: the phone sends its card number to the checkout terminal. No information is sent back. But Visa and other companies do have applications that send information to the phone over the cellular network. For example, some banks will let you get a text message every time your card is used. (This sort of application, of course, doesn’t need a phone with the special chip that can actually make payments.)

In theory, the near field communication standard will let your phone do other nifty things. It will make pairing a Bluetooth headset as easy as waving it near your phone, rather than futzing with codes and such. And you will be able to tap your phone to pick up airplane boarding passes or giveaways from advertising billboards, if you want a lot of promotional junk filling up your phone.

Pam Zuercher, who runs Visa’s mobile group, how wide the appeal of all this will be. She demurred a bit because the product is being introduced commercially for the first time. And adoption will depend on how available the phones and R.F.I.D.terminals are. But she added that there is a cultural aspect as well.

“My read is that it will be driven by the ecosystem and the landscape of each particular region,” Ms. Zuercher said. “When we look at Malaysia, there is extremely high penetration of smart mobile devices that have the capability of hosting multiple applications.”

In the United States, Visa has tested this technology, but it is emphasizing ways of enhancing credit cards by sending information to phones. In addition to its text message service, Visa has an application available for Android (and soon other) smartphones that will let you see coupons for Visa merchants near your current location. It is also developing a nifty way to associate a short user name, or alias, with your credit card to make it easier to enter when making purchases or transferring funds on a cellphone.

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