The battle over what kind of hardware will be used to handle contactless mobile payments is by no means over. Although telecom carriers have thrown their weight behind SIM cards (the tiny, portable circuit boards in some phones that store the user's phone number, voice, and data plan information), the competing microSD chip (a small memory card that often contains a near-field-communication radio) is not dead yet. Today, DeviceFidelity announced that it has partnered with Spring Card Systems to create a mobile payment app that works with DeviceFidelity's microSD card and communicates with MasterCard PayPass point-of-sale terminals. The new application is called moneto.
The microSD card has been in mobile payment trials for years, most notably in a test that took place in 2010 in the New York City subways.
An advantage to microSD is that the card contains both a near-field-communication chip and a secure element, so it can retrofit into older phones that don't have any NFC capability built in. Near-field-communication is a short-range wireless communication standard widely regarded as the best way to transmit contactless mobile payment information from phone to merchant terminal. The microSD form factor also makes it possible for a bank to send the necessary hardware to their customers for contactless mobile payments without involving a handset manufacturer or mobile operator; banks could send out new microSD chips to customers the way they send out new credit and debit cards today. microSD solutions have sometimes been criticized in the past for lacking a strong NFC antenna. The moneto mobile payments technology announced today uses an NFC-enabled microSD chip embedded in an iPhone case (iPhones don't have a memory slot, so a special case is required for the devices to accept microSD). iPhone users need to sign up at moneto.me to receive the case, install the moneto app from the app store, and activate their account. The user pays $80, which includes $10 of pre-loaded funds. Users can launch the moneto app to view their account balance, check transaction history and make everyday in-store purchases with a tap of their iPhone at any PayPass-enabled contactless payments reader at the point of sale. Users can fund their moneto prepaid account through direct deposit, ACH transfer or cash/credit/debit card-enabled third-party money transfer services such as MoneyGram, Western Union, PayPal or GreenDot.
"As this breakthrough mobile wallet launches in the US, it not only makes mobile payments available to iPhone users for the first time but it also opens the door for consumers to adopt NFC while pushing mobile commerce forward," said Deepak Jain, DeviceFidelity president and CEO, in a statement.
moneto also comes with a companion prepaid MasterCard to give users the ability to access cash at ATMs and make online purchases, pay bills or shop at merchants that do not accept contactless payments. moneto also enables card-to-card and wire-fund transfers from a secure internet portal accessible via moneto.me.
"Consumers have been hearing about NFC and mobile wallets for years, now with moneto they can finally start using it and with the most popular smartphone device on the planet. The moneto mobile wallet app is focused on delivering a faster and easier shopping experience that is consumer friendly," said Kevin Haddad, president of SpringCard. "Our vision is simple: People who use our applications should not have to worry 'Will this work with my phone?' as consumers can easily make secure purchases regardless of their phone, carrier, or bank."
The moneto mobile wallet is available in limited release on the iPhone 4S, iPhone 4, iPhone 3GS, and iPhone 3. A number of Android models will also be supported by the second quarter of 2012. Additional phone support will be added throughout the year.