Raising the stakes in a race to develop payment systems over wireless networks, Visa has signed an agreement with French smart card giant Gemplus that would enable Visa to offer mobile payment services through GSM phones, the Global System for Mobile communications standard, by yearend.

The alliance is another step in Visa's wireless strategy. The San Francisco-based card association has been working with the Swedish mobile company Ericsson to embed credit card information directly in a mobile device. And last month it signed a marketing and technology development agreement with the Finnish cellular phone maker Nokia.

"Our objective is to enable our member banks' customers to pay in a secure way using any convenient device, including mobile phones," said Stephen Schapp, executive vice president at Visa.

Through its partnership with Gemplus, Visa would develop a number of payment solutions based on SIM technology, the Subscriber Identity Modules that authenticate the users of GSM phones and typically reside on smart cards. Gemplus has 40% of the SIM market, and is expected to deliver 150 million units this year.

"With over 250 million SIM-card-based mobile phones in the world, the GSM-installed base is poised to become a major payment channel," said Bertrand Cambou, chief operating officer at Gemplus. "Consumers need to be able to pay on the move, and our new technology combined with Visa's established methods and network will allow mobile operators and participating banks to address this need."

Visa and Gemplus have goals similar to those of their competitors, MasterCard International and Oberthur Card Systems, which recently signed an agreement to develop a chip card that provides secure transactions over GSM phones.

Visa said it hopes to beat MasterCard to market by releasing certain mobile payment services by the end of the year, and that its partner, Gemplus, has a larger GSM market share.

Visa and Gemplus will also develop technologies based on the Wireless Application Protocol, or WAP, an open global standard for communication between digital mobile handsets and the Internet, and WIM, a tamper-resistant device that stores and processes user identification and authentication information.

Joe Chouinard, vice president of new e-commerce channels at Visa, said Visa would initially focus on putting simple payment data on a phone, such as credit card account number and expiration date. But more complex applications will be developed, he said, such as using the chip card to provide access to a digital wallet on the bank's server that would contain a user's debit and credit card numbers.

"We can envision a point in time where a consumer would get a mobile phone and dial up their Visa bank and securely download a credit or debit application to the phone," Mr. Chouinard said.

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