Visa talks up mobile payments, invests in wireless
Mobile banking hasn't caught on yet in U.S., but CEO calls cell phone the "most promising form of payment system" available.
Wireless transactions are common in some countries, such as Japan, where shoppers with mobile phones can pay with a wave of a handset instead of a swipe with a credit card, but the market is in its infancy in the United States.
U.S. mobile service providers see mobile payments as a way to increase customer loyalty while payment companies such as Visa view phones as the key to winning over American consumers, who use cash and checks for 46 percent of their spending.
"I think the mobile device is simply the most promising new form of payment system available today," Coghlan said during his CTIA keynote.
About 57 percent of U.S. consumers are interested in using cell phones for purchases and 64 percent would consider leaving a wireless service provider that did not offer mobile payments, Coghlan said, citing a Visa survey of 800 people in mid-March.
Visa said on Wednesday that it would become an investor in Web venture dotMobi, which is promoting use of the .mobi Internet domain address--instead of .com, for example--for mobile Web browsing. It did not disclose the size of the investment.
Visa also said it was working with wireless chip developer Qualcomm on bringing technologies to market to allow the consumer to make credit card-like transactions with a phone and a reading device.
Qualcomm is the dominant supplier of chips based on the CDMA wireless network platform widely used in the United States.
It also said that handset maker Kyocera Wireless had agreed to support the Visa mobile payments platform in its phones.
Visa's announcements came a day after AT&T's mobile unit Cingular announced plans to let consumers manage their bank accounts and pay bills on mobile phones through agreements with several banks including Wachovia.
Analysts believe mobile payments could become a big market in the United States, but Forrester Research analyst Charles Golvin said it would not happen any time soon.
"In the long term, more than five years out, I think mobile payments will be significant," Golvin said.