How Samsung only scratches the surface of Tap-to-Phone

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It may be too early to write the obituary for the plug-in mobile card reader, but new technology is putting a few nails in the dongle's coffin.

Samsung's upcoming XCover Pro phone, which can accept contactless payments without add-on hardware, is the first of what Visa hopes will be many devices capable of natively handling NFC payments.

Visa is working with manufacturers in 16 markets globally to pilot use cases and implementations of "tap to phone," hoping to lower barriers to payment acceptance. The same technology could be built into wearables or other tools that small businesses and sole proprietors carry.

"This is not [only] for Samsung. The Tap to Phone standard is a standard that is available to hardware manufacturers who have handsets and control the secure element and have all those capabilities, but also to software providers," said Mary Kay Bowman, head of global seller solutions at Visa, at a press event in New York.

Samsung has been working with Visa "for quite a while, and have really been investing in making their devices available to enterprises, not just on the consumer side," Bowman added. "The Tap to Phone standard really complemented their enterprise strategy for handsets."

Bowman joined Visa a year ago; she was previously Square's head of payments, and before that worked at Amazon.

Samsung's XCover Pro, announced Sunday, is designed for enterprise use. It has a removable battery and a rugged build that makes it more reliable for taking into the field, even in extreme altitudes or humidity. The handset also has a push-to-talk button that can allow the phone to operate like a walkie-talkie.

Visa's technology does not require special hardware to be added to an NFC-capable device, but Samsung's implementation relies on the device maker's access to the secure element, Bowman said.

"Handset manufacturers have that control, but there are other ways to make those transactions secure, so OS providers as well as other technology providers can partner or utilize those other capabilities that handset manufacturers make available on their platform," Bowman said. "You won't necessarily have to have control of the secure element, but you do have to work within the developer standards of the handset manufacturer and the OS manufacturer."

The technology can potentially support P2P transactions, but Bowman envisions a broad applicability of this technology to face-to-face retail. One example could be pop-up stores within bigger retail stores, without the need to plug into the larger store's POS system.

Another example is in less developed countries where electricity is less reliable. By using a battery-powered smartphone, retailers could accept payments where they couldn't necessarily use a stationary POS device, Bowman said.

Visa is currently running pilots in Canada, the U.K., Ukraine, Turkey, Costa Rica and Malaysia. It also has pilots planned in Poland, Spain, Italy, New Zealand and Australia.

In Australia, Visa is working with National Australia Bank (NAB) and Melbourne-based Quest Payment Systems to enable users to tap their card on a merchant’s smartphone for transactions up to A$100, the Australian limit for PIN-less contactless payments.

Commonwealth Bank of Australia is separately using Mobeewave’s SoftPOS technology. It is working with Mastercard, Cubic Transportation Systems and Transport for New South Wales on using that system to handle transit payments.

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NFC Network rules Mobile payments Mobile point-of-sale Wearable payments Visa Samsung
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