Visa Introduces a Credit Card on a Phone

Copied and Pasted by Jennifer Ng

I wrote last week about a way to make your cellphone work like a credit card by applying a sticker to the back. The sticker, equipped with a radio frequency identification, or R.F.I.D., tag lets you wave the phone over a terminal to make a purchase.

Visa is introducing a cellphone payment system that is more than sticker-thin. The service is currently available only in Malaysia, but it will be expanded to other countries in coming years.

Like some phone payment schemes already used in Japan, the Visa service uses a chip on the phone to communicate with a payment terminal. But the latest version is based on a global standard for phones and telephones called near field communications.

Here’s how it works:

You buy a phone with the appropriate near field communication chip in it, such as the Nokia 6212.
You connect the phone over the mobile Internet to your bank to set up your payment account.
When you want to buy something, you wave the phone within 4 cm of the terminal at the merchant. The transaction proceeds as if you have swiped your magnetic stripe card in the terminal.

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