Tuesday, August 9, 2011

NFC


We know Visa is getting serious about mobile and digital payments. Part of this plan involves adopting NFC and other chip technologies that will enable mobile transactions. Today, the company isannouncing that it will accelerate the migration to EMV contact (those chips that are sometimes found in your credit cards) and contactless chip technology in the United States.
Visa says that the adoption of these chip technologies will help prepare retailers and payments companies for the arrival of NFC-based mobile payments by building the necessary infrastructure to accept and process chip transactions that support either a signature or PIN at the point of sale.
Jim McCarthy, global head of product at Visa said in a release: “As NFC mobile payments and other chip-based emerging technologies are poised to take off in the coming years, we are taking steps today to create a commercial framework that will support growth opportunities and create value for all participants in the payment chain.”
As Visa’s Global Head of Mobile Product Bill Gajda told me last week, the company is bullish on NFC, but realizes that the wide scale adoption of the technology probably won’t happen until later this year at the earliest.
Of course, globally, Visa will continue to support its range of cardholder verification methods including signature, PIN and no-signature for low-value, low-risk transactions. But in the longer term, Visa expects that the use of verification methods such as signature and PIN will be reduced or eliminated entirely as new and dynamic forms of cardholder verification are implemented with chip technologies.
Visa also says that it will require U.S. acquirer processors and sub-processor service providers to be able to support merchant acceptance of chip transactions no later than April 1, 2013.
While many argue that NFC will have an uphill battle when scaling, it’s a positive sign that Visa is pushing its strategy. Mastercard also partnered with Google on NFC payments with the upcoming launch of Google Wallet.

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