Visa develops over-the-air NFC update for smartphones

Payment firms make it easier for networks to offer contactless payments

Payments giant Visa hopes to make it easier for consumers to get their hands on its contactless payment system by providing an over-the-air update for smartphones.

The new service will make it easier for banks and mobile network operators to establish a mutually agreeable mobile payment system, Visa said.

The service, developed in collaboration with Oberthur Technologies, will make Visa's payWave system available as an over-the-air update to smartphones equipped with near-field communication (NFC) chips.

"Financial institutions, mobile network operators, and even transit operators now have a simple, secure process to activate payment applications at scale and make mobile payments part of everyday life for consumers around the world," said Bill Gajda, head of mobile products at Visa in a statement.

Contactless payments have long been promised to revolutionise retail markets, without any apparent indication of consumer demand, said Catherine Haslam, an analyst with market watcher Ovum.

The strength of Visa's new service is that it should make it much easier for mobile operators to include contactless payments technology, without having to go through the task of negotiating payment clearing and processing arrangements with banks.

"This makes it much easier to get mobile payment technologies in consumers' hands," she told Computing.

But there is still little sign that consumers will rush headlong to adopt the technology, she warned.

"NFC has worked really well in transport, where both consumers and operators benefit from reduced queuing times," she said.

It is unlikely to be such a compelling technology in retail until it is integrated with store's customer loyalty cards, she predicted.

Firms such as McDonald's have already introduced the infrastructure to support Visa's payWave at some of its stores. But few other retailers have yet followed suit.

Meanwhile, Visa expects that the London 2012 Olympics will prove a major testing ground for the technology, where it will be used on the transport network as well as on 350 Coca-Cola vending machines.