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Visa said on Thursday that its "contactless" smartcards will allow consumers to pay for goods and services without having to dig in their pockets for cash or search their wallets for charge cards.
Based on an international wireless standard, ISO 14443, Visa's new specification uses a chip embedded in a plastic card or a device such as a mobile phone. The card, mobile phone or other device is then held up to 10 centimetres in front of a terminal and a wireless interface transits the payment information.
In terms of security, the transaction can follow the normal payment process with the cardholder providing a signature or PIN number to verify their identity if required by the retailer.
Such smartcards are currently being used in transport systems in Europe and Asia, and Visa believes that its latest development will encourage their spread into areas such as parking and vending machines, as well as locations where payment cards are not often used by consumers, like fast-food restaurants.
"Visa's vision of universal commerce or u-commerce enables people to decide when, where and how to make a payment," said Sue Gordon-Lathrop, vice president, emerging consumer environments, at Visa International, in a statement. "This new technology removes the need to insert or swipe a payment card making it easier to pay in places where speed and convenience are important. This latest effort and other initiatives tied to chip and magnetic stripe technologies move us closer to our goal of displacing cash."
The first use of the new system will be in South Korea where telecoms company SK Telecom plans to develop products based on the Visa spec. The two companies are already working together to test the viability of infrared payment for mobile phone users.
Visa is also working with several vendors such as Cybernet, Ingenico, Philips Semiconductors and Smartcard Solutions, to enable Visa member banks and merchants to introduce the system for everyday payments.
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