Visa Europe and Wireless Dynamics Inc. are teaming up to offer a mobile contactless-payment service for Apple Inc. iPhone users in the United Kingdom, the card association announced Jan. 25.
Visa Europe first launched the service in collaboration with Turkey-based YapiKredi Bank AS and Turkcell, Turkey’s largest mobile operator. IPhone users in Turkey may make purchases with their mobile phones at more than 40,000 terminals able to accept contactless payment in that country.
The card company set its sights on Europe because contactless payments there are gaining momentum, especially in the UK, where banks have issued some 12 million contactless cards and 80% of all contactless transactions in the region occur, (
In the UK, Visa Europe is testing its contactless mobile payments service with Fidelity National Information Services Inc. and Coventry Building Society, a Visa Europe spokesperson tells PaymentsSource.
Visa did not reveal the details of the partnership or when the service will officially roll out to all UK consumers.
Wireless Dynamics, a Canada-based Near Field Communication and Radio-Frequency Identification technology provider, will provide iPhone users with a clip-on accessory called iCarte, which is available through banks or mobile operators.
The iCarte accessory contains an antenna that communicates with Visa’s payment application and an embedded secure element chip that can securely the Visa Mobile card and multiple Visa accounts, the spokesperson says. Visa anticipates consumers will use only one card for the first use, she adds.
Consumers attach the iCarte accessory to the phone and then download the companion Visa Mobile application for iCarte from Apple’s online application store.
Once the Visa Mobile card is activated, consumers may start making purchases by launching the application, selecting which Visa card they would like to use and touching the phone to any contactless-enabled terminal across Europe. Visa did not say whether consumers may use the phones to pay at contactless-enabled terminals in other countries.
ICarte is compatible with the iPhone 4, iPhone 3Gs and iPhone3G. Banks, mobile operators or other distributors will determine what consumers pay to use the service, the spokesperson notes. The initial volumes in Turkey, however, are being supplied for free, she says.
Merchants will pay the same interchange rate when accepting contactless payments via plastic cards or with their mobile devices, the spokesperson says. Visa did not say what the fees are.
Visa Europe is planning deploy the service in other European countries, including Italy, France, Poland, Spain and Switzerland sometime this year.
Visa Inc., though not directly involved with Visa Europe’s operations, already has an established partnership with DeviceFidelity Inc. to bring mobile contactless payments to existing handsets using microSD chips (
Overall, Visa Europe’s approach is another attempt to bridge the gap while the payments industry waits for NFC-enabled mobile phones, Ablowitz says. ICarte is similar to other accessories such as microSD cards that enable non-NFC phones to make contactless mobile payments, he notes.
NFC chips enable two-way communication with other NFC chips to support the downloading of information such as mobile coupons or reward points.
In the past year, many card companies have teamed up with technology providers to create systems that provide less costly approaches to mobile payments (
“It is very easy to get excited by mobile payments, and the industry is seeing all the pieces line up,” Ablowitz says.
But banks may experience some challenges with mobile payment because it is still unclear whether they or mobile operators will own the chip that contains the payment information, he contends.
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