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Posted at 8:35 AM ET, 02/18/2011

Visa finds a way to make your smartphone an e-wallet

By Hayley Tsukayama

Visa has been demonstrating its PayWave technology at the Mobile World Congress, which lets any smartphone user convert a handset into an e-wallet.

As CNET reported from Barcelona, this year, Visa is planning to launch a contactless payment system for mobile phones that customers can use by inserting a microSD card into the backs of their handsets. (For Apple iPhone users, Visa will have a "special plastic skin.")

There have been rumors that the next version of Apple's iPad and iPhone will have this technology built in, but, as Bill Gajda, global head of Visa Mobile, told CNET, "people don't want to wait two years for NFC-enabled phones to come out or to switch phones. You can make payments today on the iPhone 4."

The CNET report says that banks will hand out the microSD cards to customers, who will then download the PayWave app. At stores with the readers for contactless payments, customers will simply open the app, line up their phones with the reader and click or slide a button to pay. Visa argues that this system is safer than using a traditional credit card, since the chip generates a unique authentication code for each transaction and doesn't give stores your credit card number.

Chip expert Karsten Nohl, however, told CNET that near-field communication payments still have their security weaknesses and that the technology may need a bit more time to be completely safe.

Does the idea of paying for things with your phone appeal to you? Or do you prefer your plastic?

By Hayley Tsukayama  | February 18, 2011; 8:35 AM ET
Categories:  Gadgets, Shopping  
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Next: Report: Apple's new iPhone won't be smaller, just cheaper

Comments

It's bad enough when theives want your wallet, now they will demand your cell phone also. Is their law on the books for pick-pocketing cell phones, yet ? I'll stick to my plastic thankyou. That I leave at home and only take it when I'm going to use it.

Posted by: garybelcher1 | February 18, 2011 11:18 AM | Report abuse

It sounds like a new version of "Trust Me, I'm from the Government."

Posted by: Bearsden | February 18, 2011 11:42 AM | Report abuse

Article does not indicate whether this is a debit or credit transaction. In either case, how do you convince the bank/credit card company that your cellphone was stolen?

I wonder how many individuals lock their cellphone access between uses to prevent the thief from using this application.

Also, is there anything to prevent removing the card from removed and used with the users info in another cellphone?

This maybe convient but I'll continue to sign for my purchases.

Posted by: AmericanRealist | February 18, 2011 12:48 PM | Report abuse

"now they will demand your cell phone also". You mean they don't steal cell phones over there? As for the question: of course the "one device-one id" per person would be logistics paradise; but it would also be more risky: you lose it, you lose everything. Of course it depends where do you live, but getting a new plastic can take anything from 24 hours to one week. One week without - well - existing?? The obvious solution would be a subcutaneous device...

Posted by: jorge_mt | February 18, 2011 12:57 PM | Report abuse

This may make banking easier but I'm concerned about potential security issues.

Posted by: Techtalker | February 18, 2011 3:29 PM | Report abuse

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