Borrowing money from a friend for a taxi ride, splitting the restaurant bill among a group of diners or sending funds to a student at college could become an easier and faster task through a new mobile-payment option Visa Europe is launching this week.
Responding to what it calls a growing demand for mobile payment, Visa Europe has created an application to enable Visa cardholders to send funds to other Visa cardholders from their mobile phones, the card association announced Sept. 28.
Visa Europe plans to make Visa Mobile Person-to-Person, which works on any mobile phone that uses Google Inc.'s Android operating system, available to member banks on Oct. 1, spokesperson Saphie Jones says.
Each bank in the Visa Europe network would determine individually whether to make the service available to customers, who would then register, Jones says.
In the initial launch, funds transfers in euros will be available through an English-language Android application, Jones says. As consumer demand grows, Visa Europe plans to develop applications for use on other phone systems and in other languages, and it will add the ability to transfer multiple currency types, Jones adds.
The mobile-payment application enables registered users to transfer funds to any Visa cardholder in Europe from any Android mobile phone, backed up by the security systems in place for Visa Europe payment processing, a Visa Europe press release said.
The application enables consumers to transfer funds by using the mobile phone's address book contacts, another mobile phone number, or a specific Visa credit, debit or prepaid card number, regardless of whether the recipient is registered with the service, the press release said. More specific details on how the process works were not immediately available.
Visa Europe says it developed the software with Monitise PLC, a London-based mobile-payments company.
In the press release, Visa Europe Chief Executive Peter Ayliffe indicated the new application represents just the beginning of changes in the European payment system.
"The way we pay is changing, driven by new technologies and growing consumer demand for more flexible payments," he said. "Today's announcement is the first in a series of new products and services that Visa Europe will be launching in the coming months."
How significant the demand is for a mobile-payment option in Europe is difficult to gauge, but the mobile-payment trend is growing rapidly, observers say.
"I don't think anyone is screaming for it, but then we as consumers often don't know that we want something until we see it," says Zil Bareisis, a London-based senior analyst for research firm Celent. "Visa, as a central scheme, certainly is in the position to provide a [service] without fragmenting the market unnecessarily."
Ayliffe's announcement that the application was the first of many new developments "indicates Visa Europe is taking mobile seriously and is investing to position itself as a player that can provide relevant services to its banking community," he says.
Patricia A. Sahm, managing director at Auriemma Consulting Group, views 2011 as a "tipping point year" for mobile payments because of the growing number of smartphone users.
"Players like Visa Europe are setting up their partnerships for mobile infrastructure now so that when consumer demand grows, they will be ready to serve it," Sahm says.
"I view 2012 as the year in which we'll see significant traction for mobile payment, and there are certain segments, like younger people, who can't wait," she adds.
Besides the mobile-pay option, consumers also may sign up for Visa Alerts. Through the service, the bank sends customers an email or mobile text alert whenever someone uses their Visa card to make a purchase or cash withdrawal, Jones says.
