Updates to this story
Visa Europe has announced today the launch of In2Pay, a system which uses a microSD card inside a mobile phone to make transactions.
The contactless payment system uses near field communications (NFC) technology via a microSD card called In2Pay, developed by DeviceFidelity. Not many mobiles have NFC technology built-in, which would allow contactless mobile phone payments, but the majority of smartphones, iPhones excluded, include microSD slots.
“One of the key challenges to the success of mobile payments is the supply and availability of NFC handsets,” said Mary Carol Harris, Head of Mobile at Visa Europe. Until NFC comes as standard in the majority of handsets, said Carol Harris, working with companies like DeviceFidelity will make NFC more accessible and speed up progress in mobile payment.
The microSD card can also be used for storage, so mobile users will not have to choose between the functionality of NFC and the ability to store music and videos.
The In2Pay microSD card is based on the Secure Element industry standard and is EMV and Global Platform compliant. It supports Javacard, MiFare, and the Open Platform architecture to allow full integration with Trusted Service Managers and Wallet developers. The In2Pay APIs have been licensed out to several developers in efforts to create new mobile banking applications.
It is not clear just how secure the new technology is and how easily it could be abused. The fact that it can be stored within a mobile phone means that the loss or theft of your mobile means your bank account is also at risk, so we imagine a system for reporting such incidents in a similar manner to that of credit card loss or theft would be employed.
And what happens if your juice-hungry smartphone goes dead, as they tend to? Unless you find another device to use the microSD in you may not be able to make payments, unless you keep your old-fashioned credit card on hand as a backup, which kind of defeats the purpose of having a microSD payment card in the first place.
In2Pay is currently only available in Turkey, and only to BlackBerry owners who are also customers of Akbank, but Visa said it has plans to expand to other smartphones, including those by HTC, Samsung, LG, Nokia and Motorola.
The iPhone won't get this technology because it does not support microSD cards, but DeviceFidelity was not content to ignore the large Apple market and made an In2Pay contacless case for iPhones in May.
It has not been confirmed, but Visa has suggested that this technology may be rolled out to other countries throughout Europe in the near future.
*Update TechEye spoke to Mary Carol Harris, head of Mobile Visa Europe, about the new payment system, addressing some of the concerns we raised.
We asked her what prompted the microSD approach. She said: "Visa Europe sees mobile payments as a strong customer proposition for people in a hurry. Trial results and customer insight surveys have shown strong customer traction based on speed and convenience. Everyone has a mobile with them so it is convenient to use for payments, and also faster and more secure than using notes and coins."
As far as added benefit is concerned she told us: "People always carry their mobile phone and usually have it immediately to hand. The aim is to make the payment process even simpler, faster and more convenient by making contactless payments using mobile phones and credit cards at all high-traffic points of sale (e.g. supermarkets, vending machines, etc.)"
She added: "The new technology will enable consumers to use their mobile devices to make simple, secure and convenient Visa mobile payments at merchant locations with contactless acceptance."
We asked about the potential risks of the new payment system and what kinds of protections were in place. Harris told us that there are multiple layers of security protection in place, including password protection on the Visa mobile payment application, advanced security technology to uniquely identify each contactless transaction for the prevention of counterfeit fraud, transactions being backed through Visa's processing network and analysed in real-time for potential fraud, and the potential to immediately deactive an account if the mobile device is reported as lost or stolen, just like a standard credit card.
As for the mobile phone going dead, she said: "As of today, the mobile needs to have some battery in order for the consumer to make the payment." So, better charge up, bring a spare battery, or don't destroy that credit card just yet.
We asked if Visa believes this is the way forward for the industry and if there are any plans to bring the technology to other regions. Carol Harris told us that Visa Europe is currently in discussions with a range of banks, wireless operators, handset manufacturers, and retailers about bringing mobile payment options out to more consumers.
She said that over the last two years Visa has been working with key market players to test mobile payment services, SMS transaction alerts, merchant offers, and money transfers. She revealed that a number of trials have been organised throughout Europe, including Finland, France, Italy, Poland, Portugal, Spain, Switzerland, UK and Turkey.
Harris said "To bridge the gap between more these handsets becoming available Visa is investing in contactless accessories such as microSD that can be added to existing handsets. These may be an answer for the short to medium- term to enable early commercial solutions and to keep momentum going.”