Visa Hopes Its New Platform Will Speed M-Commerce Trials

Visa USA has signed up an undisclosed number of member financial institutions to use a new m-commerce technology platform the card network announced this week that ties together a wide range of functions, including contactless payment, over-the-air personalization (OTA), couponing, mobile banking, Internet payment, and person-to-person (P2P) funds transfers. A Visa executive refuses to disclose details regarding the banks that have shown interest so far, but adds the platform will drive all future m-commerce trials sponsored by the association, including a number expected this year. “We do have takers, and you'll be hearing [more] about that,” says Pam Zuercher, vice president of product innovation at Visa. Visa, which announced the platform at the giant International Consumer Electronics Show in Las Vegas, expects rapid development of the market for mobile payments. “We expect over the next 12 months we'll get learnings that will inform where we go for market rollout,” Zuercher says. One critical element is availability of phones equipped with near-field communication (NFC) technology, which allows handset users to make contactless payments. At the same trade show, handset maker Nokia announced a new phone model, the 6131, that comes with NFC embedded and is intended for use in m-commerce trials. “The market is moving toward readiness for NFC payment,” says Zuercher. “It's those signals that lead us to believe in the next 12 to 18 months there will be handsets with that capability that will be picked up by the early-adopter set.” Embracing applications, security standards, and business models, the Visa platform is clearly aimed at speeding up the implementation of m-commerce trials by providing a sort of standardized template that incorporates what Visa has learned so far. In May, Visa concluded a five-month pilot of handset-based contactless payments at a sports arena in Atlanta, and last fall announced an ongoing pilot of mobile couponing involving 500 employees. “The platform is not a commercial solution, but it will help us execute [a pilot] more quickly,” says Zuercher. “It's a significant step for the industry because it enables those trials to happen quickly and get to a market rollout scenario.” The platform is available to Visa members working with what Visa refers to as other members of the m-commerce “ecosystem,” particularly wireless carriers and mobile-device makers. Since the platform does not represent a commercial rollout, says Zuercher, Visa has not applied fees to its use. Pricing, she says, “is one of the learnings we'd be looking to get” from upcoming pilots. She refuses to give details of how many such pilots are planned, or when and where they will take place. The platform brings together in a single set of applications a wide array of financial functions that up to now have been tested and offered separately by a variety of processors, banks, and card networks. P2P transfers, for example, have been launched by a raft of m-commerce startups over the past 18 months or so, as well as by established players like PayPal Inc. These “point solutions,” says Zuercher, address only “a piece of the puzzle.” Visa will add P2P, along with mobile Web payments, to the platform later in the year. Another key element is OTA personalization, the process by which users can download via a wireless network applications and account data for functions such as NFC payment. This capability, considered crucial for commercialization of NFC, is already being tested by MasterCard Worldwide in pilots in New York and Dallas. MasterCard officials have been critical of Visa's Atlanta trial because it did not feature OTA but rather depended on a limited number of phones that were manually programmed before being distributed to participants. Critics say this is fine for a small trial but is impractical for larger tests and for eventual rollouts. Meanwhile, banks and wireless carriers are embroiled in a long-running dispute over where NFC capability should reside, with the carriers preferring the subscriber identification module (SIM) card, which they control. Banks and their card networks want to keep it outside of the SIM. But Zuercher says the new platform is agnostic in this matter. “The platform is flexible enough to support a number of different ways” of enabling NFC payment, she says. “Through the trials we're hoping to answer that question.”