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MicroSD Card Brings NFC to Phones for Credit Card Companies, Banks

The In2Pay system is being tested in-house by two credit card firms, to determine if it can be used for sales transactions at NFC-enabled readers already installed at stores around the United States.
By Claire Swedberg
In the case of In2Pay, Jain says, the two companies trialing the system are testing how well they can use the technology in the phone to pay for purchases, by tapping their phones, rather than using an RFID-enabled plastic credit card, against the reader. "We can't disclose specific objectives for each pilot," he states, "but most issuers want to be comfortable that an In2Pay-enabled mobile device is capable of completing an end-to-end payment transaction, from merchant acceptance to payment authorization."

The In2Pay microSD card stores such data as bank account information, expiration date or loyalty points, written to the card's memory in encrypted form. The card can also store data written to it by an NFC device, such as the point-of-sale NFC terminal or a smart poster. That information could include coupons, schedules or promotions. The DeviceFidelity software that supports the In2Pay card would reside on the database of the finance company, bank or phone service provider, to interpret information from the microSD reads, as well as provide data to the card via a reader or smart poster. A third-party manufacturer, Jain notes, is making the microSD card itself.

DeviceFidelity's CEO, Deepak Jain
Typically, a customer would receive the In2Pay microSD card—which measures 10 millimeters by 15 millimeters (0.4 inch to 0.6 inch)—in the mail, along with instructions regarding how it should be used. Once the card is inserted into the phone's memory slot, the In2Pay application is launched and the phone automatically calls the bank, at which point the phone's user can activate the card by following prompts on the phone's screen. The user then enters a store with NFC-enabled readers and begins making purchases. The card could also be utilized to receive coupons or discounts. In a loyalty program, for instance, after completing a predetermined amount of purchases, a person could be alerted, via a message over the phone, about a $100 gift certificate that has been loaded on the card's memory and is ready to be redeemed.

Thus far, the pilots have taken place only with the credit card companies' employees. The next step for those businesses, Jain says, is to begin providing the cards to customers. The in-house pilots will continue through the first half of 2010, and then expand to broader user trials in the second half of next year, with full deployment expected to occur in 2011. There are enough merchants with NFC-enabled POS devices, Jain says—especially in urban areas on the East Coast—that users will be able to utilize In2Pay to pay for items at convenience stores, movie theaters and restaurants. He expects young people to be the first to use the system.

In2Pay solves a problem that has delayed NFC payment deployment, Jain indicates—namely, the lack of NFC-enabled phones. "It's a chicken-and-egg situation," Jain says, "The merchants are looking for a good business case [for installing an NFC reader in their stores], but unfortunately, NFC-enabled mobile phones aren't showing up." With this technology, he states, "now we can address that problem with 65 percent of phones."

The In2Pay system could also be used for transportation applications, such as paying for train or bus travel, proving a person's identification, or providing access control. In the future, Jain says he expects that multiple organizations, such as financial institutions, transportation agencies and retailers, will all be able to use the In2Pay system, enabling a consumer to tap his or her phone against a reader, select an option on the phone's screen regarding which bank account or type of service he or she is accessing, and then complete the transaction.

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