Visa Beats Apple to iPhone NFC Payments in Euro Experiment

by Mercator Advisory Group 0

As Mercator expects, it looks more and more like 2011 will be the year of the final arrival of NFC mobile contactless payments. The world’s leading handset manufacturers have been introducing, or planning to integrate, NFC in their new handsets coming out this year. And, Apple has long been rumored to have NFC components in the upcoming iPhone 5 which could single-handedly change the playing field.

But the banking industry is not willing to be late to the game. Visa announced a new iPhone accessory that would enable mobile contactless payments on the some 100 million iPhones already in consumer’s hands.

iPhone users simply attach the Wireless Dynamics iCarte accessory, available through their bank or mobile operator, to their iPhone and download the companion Visa Mobile application for iCarte App from the App Store. The iCarte accessory contains an antenna and an embedded Secure Element where the Visa mobile card is safely stored. This “card”, in turn, works with an app from the App Store to enable payments on the iPhone. Once the Visa mobile card is activated, consumers can start making purchases by simply launching the app and touching their iPhone on any contactless-enabled point of sale terminal across Europe, without the need to enter their PIN*.

The iCarte accessory is designed to equip iPhone users with the tools they need to buy goods using mobile contactless technology from a growing number of European retailers. Visa Europe’s first deployment has been launched in collaboration with Yapi Kredi bank and Turkey’s largest mobile operator, Turkcell. Yapi Kredi customers equipped with a Turkcell mobile plan will be the first who can purchase directly from their iPhone at 40,000 contactless point of sale terminals in Turkey using their iCarte payment accessory. The product is also being used in the UK with Visa staff in London with partners FIS, a leading provider of prepaid platforms, and Coventry Building Society. To further commercialise the accessory, Visa Europe will engage its member banks and partner mobile operators in Italy, France, Poland, Spain, Switzerland, Turkey and the UK, all of which have rapidly maturing contactless payment infrastructure.

The Visa iCarte solution is not a fully-integrated NFC solution – it relies on an add-on device rather than built-in features to enable NFC. Nonetheless, such “bridging solutions” provide much more flexibility and could save lots of time in terms of rolling out the services. Visa certainly hopes that they will be able to capture consumer attention as early as possible and there will be enough room for the co-existence of these bridging solutions and the so-called integrated NFC solutions.

Image of the iCarte accessory:
Link to the Visa PR: