Visa Inc. has launched the world's first commercial mobile payments service for point-of-sale transactions using Near Field Communications technology.

The service marks the first time consumers can buy an NFC-enabled mobile device off the shelf and use that device to make Visa payWave-enabled transactions at the point-of-sale instead of using their payment card. Maxis, the largest wireless carrier in Malaysia with more than 11 million subscribers; handset manufacturer Nokia; and Maybank, a leading financial institution in Malaysia, have teamed with Visa to offer Visa payWave on mobile devices.

"Our mobile strategy is designed to take advantage of Visa's global network and ubiquitous presence to deliver innovative mobile payment and related services in four key categories: payment, money transfer, mobile acceptance and value-added services, such as alerts and notifications," said Pam Zuercher, head of product innovation for Visa, Foster City, CA.

"With 4 billion mobile devices worldwide and 80 percent of the world's population living within range of a cellular network, Visa has a significant opportunity to offer its products and services to geographies where they don't exist today, and enhance the consumer payment experience," she said.

The service allows Maybank Visa account holders to wave their NFC-enabled Nokia 6212 classic handset in front of a contactless reader to complete a secure Visa transaction in a matter of seconds.

Maybank Visa account holders can download their Visa payWave credit account details directly to their Nokia 6212 classic handset over the Maxis wireless network.

Once the account has been personalized on the phone, account holders can then begin to make purchases at any one of the 1,800 merchant outlets that currently accept Visa payWave in Malaysia.

The contactless chip embedded in the device will also power a number of additional functions, including a contactless transit application that enables Malaysian commuters to pay for charges while using metropolitan transit systems, bus terminals, highway toll gates and car park facilities at more than 3,000 contactless payment touch points throughout Malaysia.

Maxis has branded these mobile payment services under the name Maxis FastTap.

Maxis' collaboration with Visa is part of its wider NFC strategy, which includes multiple applications such as mass transit, road tolling, parking, mobile marketing through smart posters and retail payment through Visa payWave.

"Today's announcement focuses on Malaysia, but represents a tipping point for the payments industry globally as we move from mobile payment pilots to commercial availability," Ms. Zuercher said.

Mobile payments gaining momentum
Visa is driving the convergence of two of the world's most ubiquitous consumer products, 1.7 billion Visa cards and 4 billion mobile phones, by bringing its expertise in payments to the mobile industry.

Over the last two years, Visa has worked closely with mobile network operators, handset manufacturers and financial institutions, merchants and technology provider to develop and commercialize mobile payments and related services.

Visa announced last week that it is extending mobile payments to Singapore in partnership with Citibank Singapore Limited and MobileOne (M1).

The Citi M1 Visa payWave payment trial on mobile devices marks the first program in Singapore where a mobile device will be used for payments at the point-of-sale.

More than 750 merchant locations across Singapore are participating in the three-month pilot, which begins in May 2009.

Up to 300 selected Citi M1 Visa Platinum account holders will be invited to join.

Participating account holders will be provided a Nokia 6212 classic, the same NFC-enabled handset used in the commercial launch in Malaysia.

Participating Citi M1 Visa Platinum account holders will be able to purchase an item at a Visa payWave merchant in Singapore simply by waving the mobile phone in front of a contactless reader at the point of sale.

In Canada, Visa, RBC, and Rogers Wireless have come together for the next phase of a mobile payment pilot, which will ultimately allow Canadians the flexibility to make purchases securely at the point of sale with a wave of their mobile phone.

Designed to be a fast and convenient way for customers to pay for small purchases, pilot participants will be issued specially-equipped mobile phones that can simply be waved at Visa payWave-enabled checkout readers at select retail stores and quick-service restaurants in Toronto's downtown core.

Each geographic market has its own unique opportunities and challenges. So when can we expect a commercial deployment of NFC-enabled contactless mobile payments in the U.S.? Visa said that several barriers remain.

"Generally speaking, we look for several key market conditions that make commercial roll-outs of NFC based mobile payments possible, including high mobile penetration (in Malaysia 97 percent of the population has a mobile device, that are increasingly sophisticated), existing infrastructure for contactless payments (payment terminals that can read the NFC signal), commercial availability of NFC-enabled devices, and lastly, stakeholders in the wireless and financial services industry that have decided to partner for the delivery of mobile payments," Ms. Zuercher said.

That said, Visa is optimistic about the future of the mobile payments space.

"It is too early to make predications, but we are extremely encouraged by this first commercial launch in Malaysia and expect other countries to follow suit," Ms. Zuercher said. "Visa believes that the mobile technology is ideally suited to deliver an enhanced payment experience.

"Not only are we able to embed the payment capability into the mobile device, but we also have the opportunity to offer value-add through applications that deliver information, such as transaction alerts, account details and mobile coupons," she said.

"Through mobile payments and related services, Visa hopes to provide consumers with an enhanced payment experience and empower consumers to better manage their Visa accounts."