Visa U.S.A. Inc. said it is working with two mobile phone makers to integrate contactless payments with the devices' burgeoning banking capabilities.
The San Francisco card company said Wednesday that it has agreements with Qualcomm Inc. of San Diego and Kyocera Corp. of Tokyo to integrate near-field communications chips on their handsets with software that Visa is developing for mobile banking. Related Links
Visa has also invested in dotMobi, a consortium of wireless companies that is promoting the use of a new Internet domain name, .mobi, for mobile data transmission.
The announcements, at the Wireless 2007 conference in Orlando, provided a more detailed look at plans Visa announced in January to test mobile banking and payments technologies this year.
In a keynote address at the conference, John Philip Coghlan, Visa's president and chief executive, urged wireless carriers to work closely with financial companies to develop this new market.
"The convergence of payments and mobile communications is not just logical — it is inevitable," Mr. Coghlan said. He described Visa's mobile platform as a set of services and enabling technologies that the company will use as building blocks to develop applications for banks and carriers.
Dave Wentker, the vice president of mobile innovation at Visa International, cited his company's participation in the dotMobi consortium as a way to foster the development of mobile payments.
"There are just a few players that are in a position to make the decisions that could change the market quickly," Mr. Wentker said in an interview.
Visa said a survey it commissioned of 800 consumers who were interested in mobile payments found they would prefer, by a five to one margin, that the charges appear on a credit or debit card statement instead of a wireless bill.
The survey, conducted this month by the Alexandria, Va., research consulting firm Fabrizio McLaughlin & Associates Inc., also found that nearly 90% of consumers who were interested in mobile payments would pay more for a phone with the feature, and 58% of customers age 18 to 42 would consider switching financial institutions to gain access to such a service.
AT&T Inc. announced this week that Wachovia Corp., SunTrust Banks Inc., and Regions Financial Corp. would offer mobile banking and payments services to their customers using software from Firethorn Holdings LLC. AT&T plans to preload the application on its handsets.
Mark Siegel, a spokesman for the San Antonio telecom's AT&T Mobility, said in an interview that it is urging competitors to embed mobile banking technologies in their handsets, as well.
There is a benefit in having multiple carriers offer such services, much as there is in allowing text messages to be sent between people regardless of their phone carrier, he said.
"This benefits all of us, and the industry as a whole," by encouraging the development data services that generate revenue for the carriers, Mr. Siegel said. "It creates a rising tide that lifts all boats."
Dan Schatt, a senior analyst in the retail banking group at the Boston research and consulting firm Celent LLC, said that efforts such as Visa's have been fragmented.
Because Visa has outlined its development strategy, "you end up having a Visa card in your mobile" device, Mr. Schatt said. "I don't see a way that issuers of other cards could participate."
Contactless payments are gaining ground because a single scanner at the point of sale can read a card from any company using the technology, he said.
"I don't see that happening with Visa's approach" to mobile payments, Mr. Schatt said. "We need a way for multiple issuers to come together on one application."
