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Visa, Philips team to promote 'contactless' credit card

Posted: 30 May 2003 ?? ?Print Version ?Bookmark and Share

Keywords:visa? royal philips? contactless chip technology? smart card?

Visa Int. and Royal Philips Electronics have formed an exclusive partnership agreement under which the two companies will jointly develop and promote the application of contactless chip technology for payment transactions.

The partners said they share a common vision for widespread deployment of contactless chip technology on various consumer devices. Using the technology, consumers could easily make payments to purchase goods or unlock services simply by waving a credit card equipped with a contactless interface at a reader.

"We've been talking about the similar vision, but coming from two different directions - Visa from the payment side and Philips from the consumer device/product angle," said Gaylon Howe, EVP of consumer product platforms at Visa Int.

Visa is promoting what it calls "universal commerce" that would enable consumers to make payments "anytime, anywhere, and on any device," said Howe. Philips, meanwhile, wants to create "a standardized, open infrastructure in a connected home," where consumers can use a host of consumer devices - PCs, mobile phones, gaming devices or PDAs - to securely access information, entertainment and services, said Karsten Ottenberg, SVP at Philips Semiconductors.

One of the biggest hurdles faced by consumer electronics manufacturers designing "connected" consumer devices is developing a business model that allows devices to offer consumers an easy way to purchase content and services. Content and service providers face similar issues. They need solutions for secure digital rights management and a reliable means of getting paid.

Both Visa and Philips said they can help the content and consumer electronics industries overcome these hurdles with contactless chip technology. Rather than going it alone, the two decided to join forces.

Howe said potential customers include CE device manufacturers, content providers and the music, gaming and transport industries. Ottenberg said Philips has had discussions with key companies. By adding Visa as its partner, "We can really add momentum [to the discussions]," said Ottenberg.

Work on new near-field radio communication technology, called Near Field Communication (NFC), initiated by Philips and Sony Corp. last fall, helped attract Visa as a partner. NFC can "talk" to two diverging contactless smart card interfaces - "FeliCa" developed by Sony and "Mifare" developed by Philips - and has been specifically designed to open opportunities for smart cards in the consumer market.

NFC operates at 13.56MHz and is designed to be "interoperable with both Mifare and FeliCa protocols," while its specifications will be extended to include support for data rates as high as 1Mbps over a distance of 20 centimeters, according to Philips.

Contactless smart cards today exchange data at a speed of 212Kbps NFC could help consumer devices to offer not only "wireless peer-to-peer communication capabilities" but also "access to services based on smart card applications," according to Philips.

With the proliferation of contactless chip technology, consumer devices can in theory become ubiquitous point-of-sales devices for services. Credit cards with dual interfaces, both contact and contactless communication capabilities means they could function not just as a payment card but a storage device that could track subscriptions for services. A consumer can bring it with him to another location, to unlock services to which the holder already subscribed.

Visa has pilot programs on dual interface credit cards running in South Korea and in two other unnamed countries. The company, however, has yet to roll out any commercial dual interface cards.

Visa gave its stamp of approval last year to smart cards featuring both a contact interface and a contactless interface based on Philips' dual interface controller chip. Smart cards with the dual interface allow Visa to issue a debit/credit card with a contactless feature that can be used for building access or for buying travel tickets.

The agreement with Philips means Visa can explore other applications for multi-function cards, including the ability to offer different content and services on consumer devices.

Philips' Ottenberg predicted that the first dual interface card with multiple applications will show up in 2004.

- Junko Yoshida

EE Times

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