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Payments By Cellular Phone Coming To U.S.

The wireless short-range technology is designed for cashless payments from a cellular phone.

Laurie Sullivan

June 5, 2006

2 Min Read

Industry association NFC Forum on Monday unveiled its technology architecture and announced the first five specifications for near field communications, a wireless short-range technology designed for cashless payments from a cellular phone.

Initial specifications will become available between July and September. The architecture will include specification for a modular NFC device and protocols for interoperable data exchange.

Analysts say the NFC Forum specifications for secure payment and ticketing transactions are backward compatible with the technology infrastructure put in place today by most telecommunications companies, handset manufacturers and other companies required to make the platform work.

NFC also will turn static advertising, such as movie posters, into an interactive experience. The technology embedded into an advertisement, for example, would enable consumers with NFC-enabled smart phones to download ring tones, music and more directly from the poster.

Erik Michielsen, director at ABI Research, began testing a phone with these capabilities in April. The Java-based applet card in the Nokia 3220 lets Michielsen make payments at retail stores that take American Express, MasterCard or Visa.

The NFC-enabled Nokia 3220 payment feature runs on VivoWallet 2.0 to make the transaction. The Samsung D500 also offers this feature. Michielsen said consumers could soon see new cellular phones with these capabilities from Motorola, Sony Ericsson, BenQ and LG Electronics. "We expect to see commercial deployments next year and larger volumes in 2008," Michielsen said. "I rely on the Nokia phone for most of my payment transactions. I rarely carry cash."

Some of the financial data is kept in the phone. SanDisk Corp. provides storage cards that securely stores account numbers and other financial information in the cellular phone, said Mike Wong, company spokesman. "We also are providing an adapter to handset makers or telecommunications companies, so they can pilot the technology," he said without providing specific company names. "The storage card fits into the adapter that goes into the phone."

In May, SanDisk and Royal Philips Electronics said they will embed Philips' SmartMX chip into SanDisk's TrustedFlash cards for secure NFC transactions for ticketing and mobile payment applications.

The NFC Forum's sponsor members include MasterCard International, Matsushita Electric Industrial, Microsoft, Nokia, NEC, Renesas Technology, Royal Philips Electronics, Samsung, Sony, Texas Instruments and Visa International.

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