Don't Leave Home Without It!

For years the holy grail of radio transmission has been to design a system that could transmit information across vast distances. Recently Visa and several mobile phone manufacturers have been perfecting a technology that is designed to transmit data over distances measured in inches not miles. Dubbed Near–Field Communication or NFC, this technology is being built into many high end smartphones and will allow the user to use the phone as an electronic wallet making purchases with a simple wave of their phone.



According to a press release from Visa, NFC technology passes encrypted information between devices at close range without contact. Instead of swiping a card, shoppers can wave their smartphone near a terminal, effectively turning an NFC enabled phone into a virtual debit or credit card.



Those traveling in Europe, especially the Scandinavian countries, may have already seen this technology in action as these countries have had wireless payment systems for several years. The technology has been slower to be adopted in the US due in part to a much larger population and a more fragmented mobile phone infrastructure.



Of course, the NFC equipped smart phone is only one part of the equation. For the system to be operational and commercially viable there must be a major retrofit of millions of point-of-purchase devices. Vending machines, parking meters, gas pumps and ATMs will need to be NFC equipped. Since many of these devices already are connected to the Internet, part of the task is complete.



As other major credit card companies embrace this new wireless transaction technology, more and more smartphone makers will incorporate NFC chips into the phones and more and more retailers will accept these ePayments. The major credit card providers will continue to support a range of cardholder verification methods, including signature and PIN methods. Chip payments are generally considered to be more secure resulting in a reduction in the payment processor's fraud costs.

So, in the not too distant future, the “Don’t leave home without it” slogan may refer to your phone not your Visacard. Oh wait…they are the same thing!