Industry observer Nick Holland characterizes this move as a step in the right direction. "NFC payments will need to be industry grade and one of the largest barriers we are seeing to mobile payments comes from fear of security compromises," says Holland, who is senior analyst at Yankee Group. "Both consumers and merchants are likely to have more faith in NFC if payment entities such as Visa are certifying handsets." Yankee Group predicts that the value of NFC-based transactions will grow from $27 million in 2010 to $40 billion in 2014.
The new devices certified by Visa host the payWave application on a SIM card and feature near-field-communication technology, the short range communications standard that enables mobile phones to securely transmit payment information to a contactless payment terminal.
"This is an important step for Visa, its financial institution partners and the mobile industry," said Bill Gajda, Global Head of Mobile Product, Visa Inc., in a statement. "In addition to issuing plastic magnetic stripe or chip-enabled payment cards, financial institutions can now consider offering their accountholders a way to transform their smartphones into fully functional mobile payment devices."
Visa's certification of these smartphones paves the way for mobile device manufacturers, mobile operators and retailers to partner with financial institutions to offer Visa mobile payment functionality to consumers globally, the card network says.
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