Apple, Visa and DeviceFidelity are close. Visa Inc. and DeviceFidelity, Inc. are working to allow iPhone users to make payments by simply waving their iPhone in front of a contactless payment terminal. The new technology, developed by DeviceFidelity and certified by Apple, combines a protective iPhone case with a secure memory card that hosts Visa's contactless payment application, called Visa payWave. The technology will work for both iPhone 3GS and iPhone 3G devices.
iPhone users will be able to make Visa mobile payments in retail stores, at fast food restaurants, in taxis, during sporting events (such as at baseball games), and also make purchases at vending machines that have contactless payment terminals. Thousands of merchants throughout the U.S. have already upgraded their payment terminals to allow consumers to make Visa mobile payments. Market trials of the payment-enabled iPhone are scheduled to start this summer.
But how fast will adoption be? Analysts speculate: not fast.
What can we learn from Japan? Well, even in an extremely technology-savvy society like Japan, after 7-8 years of mobile payment introduction, only 17% of the country has an active mobile payment account. Celent, a financial services research firm, estimates that there are 28 million registered mobile payments accounts in Japan and about 20 million active mobile payments accounts. These constitute 24% and 17% of all contactless payment accounts, respectively.
Prospects for the U.S. are in the range of 4-8% penetration of contactless payments. Even so, I believe this is where the market is moving. iPhone users in particular would prefer that their phone be everything: a phone, an iPod, a computer, a TV remote, a passport, a credit card - everything.
I, for one, will be using my iPhone in the Visa network this summer.
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