MWC 2013: Samsung Deal With Visa Allows Payments Just by Waving Smartphone Near Special Reader

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By Vittorio Hernandez | February 26, 2013 12:49 PM EST

Samsung smartphone owners would soon be able to make payments for their purchases by merely waving their units near a special reader. The privilege would be open to owners of smartphones with the Near Field Communication (NFC) technology that allows a phone to transmit information to a nearby reader without touching the reader.

U.S. credit card giant Visa announced at the ongoing Mobile World Congress in Barcelona, Spain, the deal with Samsung, expected to further boost the use of smartphones to pay for items without the need for a cash or credit cards, which are vulnerable to hacking.

Samsung would equip the next generation of its smartphones with the Visa payment technology, including pre-loading the Visa payWave, Visa's contactless payment system, as an applet. It would allow banks to send payment account information over the airwaves to a secure microchip embedded in the smartphone, In turn, banks will use a secure system that relies on Visa's Mobile Provisioning Service and the South Korean tech firm's key management system.

The payWave is used at AT&T, Verizon Wireless, T-Mobile and GoogleWallet.

An ABI Research forecast that by 2017, 1.95 billion NFC-enable devices would be shipped to different markets. However, the success of the Visa-Samsung deal would be dependent on banks being persuaded to give the new technology a try.

However, eBay, a subsidiary of PayPal, which could be affected by the new technology, thinks it may not be too useful.

"I think NFC is just a technology in search of a problem to fix that does not exist because it is really easy to pay in the store," said eBay President David Marcus.

Also on Monday, MasterCard, the competitor of Visa, announced it would expand its digital wallet services beyond NFC which would allow shoppers to use QR codes, credit cards and other technologies.

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