February 25, 2013, 10:40 AM — Visa's payWave mobile payment applet will be embedded in next-generation Samsung smartphones and tablets enabled with NFC, according to an alliance that both Visa and Samsung announced Monday.
The next-generation Samsung Galaxy S IV, reportedly being announced March 15, is expected to include the Visa payWave applet, several officials for Visa and Samsung said.
Visa announced at Mobile World Congress (MWC) here that it expects the alliance with Samsung to significantly accelerate NFC (Near Field Communication) mobile payments adoption, including in the U.S., where NFC use in smartphones and NFC-ready payment terminals has been slow to catch on.
Visa rival MasterCard announced earlier Monday that it is expanding its digital wallet service beyond NFC so merchants can allow customers to use QR codes, credit cards and other technologies.
Brad Greene, the head of NFC payments for Visa, admitted there has been some "friction" with NFC payments in the U.S., even though Visa is committed to supporting it. Samsung has been making NFC-ready smartphones for more than a year and heavily advertises the near contact technology for file transfers between NFC smartphones like the Galaxy S III.
Visa struck its alliance with Samsung because Samsung is the largest smartphone maker and produces about half of all Android handsets, Visa officials said.
"Our goal is to extend mobile payments through as many devices and payment technologies as possible, but this arrangement with Samsung is special," Greene said in an interview. "It's an advantage to all parties that the Visa gateway [payWave] is built into the Samsung devices, which allows a smoother activation process....
"Over the long term, any number of payment technologies will be useful, but today we see NFC as the standard because it's based on chip technology."
In the deal with Visa, Samsung has agreed to load the payWave applet onto its mobile devices, embedded in what is called a secure element. That refers to encryption used in a chip in the core of the device. The payWave applet can also function on SIM chips, which can be moved from phone to phone.
Samsung will manage the encryption keys in the secure element of its phones, a capability Visa has delegated to it, Greene said. In turn, Samsung will provide that security capability to banks and mobile carriers to allow users to activate the service over-the-air.
With the alliance, it will be faster, easier and cheaper for banks and carriers to set up mobile payments with NFC, Greene said. Visa payWave is already used in the Isis NFC consortium of AT&T, Verizon Wireless and T-Mobile, as well as in GoogleWallet.