Lenco Mobile Technology

This could be the year that payments made by mobile phones explodes, driving a new channel for retailers and financial service companies alike. Mobile payments, or Near Field Communication (NFC), is a short-range high frequency wireless communication technology which enables the exchange of data between devices over about a 10 centimeter (around 4 inches) distance (Wikipedia). The technology essentially allows consumers to replace their wallets with their mobile phones as they can pay for items at enabled retailers simply through a chip in their phones that executes the transaction when placed (waived) within this range. The technology has progress to where it’s simple, convenient and secure. As more phones are shipped with the specialized chip and more retailers install point-of-sale mobile payment capabilities, expect to see transactions rise sharply.

A number of big name companies have already, or are planning, to enter the space. In late 2010, Visa Inc. had already made contactless payments available commercially for various Smartphone (as reported by Mobile Commerce Daily), following trials with leading financial institutions in the US, Europe and Asia. As such, it’s officially listed in their portfolio of products offered to institutions in the US. Visa partnered with DeviceFidelity, a Texas based technology company, for the development of its technology.

And you know the space has sizeable potential when behemoth Google throws its hat into the ring. Mediapost reports (through BusinessWeek) that Google might build a mobile payment service based on NFC technology. It seems though, that there is enough opportunity to support several large players in the space. IE Market Research is cited as putting the global market for mobile based transactions (not just NFC) at over a trillion dollars in 2014. With that kind of volume projected, it’s no wonder that the wireless carriers are also getting into the act. Also late in 2010, Verizon Wireless, AT&T and T-Mobile formed a venture called Isis to offer NFC based services in 2012. And rounding out the list of big name participants, PayPal may start testing its version of the service in late 2011.

Visa’s technology will be available in certain models of Blackberry, iPhone and Droid devices. They also hope to add Nokia’s Symbian and Microsoft’s Windows phone 7 to the list soon. As already a leader in secure financial transactions, Visa spent a significant amount of time testing security and usability, which will go a long way in gaining consumer trust. Financial institutions can integrate Visa’s mobile payment platform into their existing mobile apps or go with a stand-alone version. Visa is already working with Bank of America, Wells Fargo, US Bank and JP Morgan Chase and almost 20 wireless companies worldwide. For more information on mobile platforms and what they can do, visit Lenco Mobile.