Vodafone and Visa have joined forces to preview a new near-field communication (NFC) payment product for smartphones, demoing the Vodafone SmartPass app in Sydney before its commercial release next year.
The new service will allow Vodafone customers to make payments at Visa PayWave terminals using their NFC-capable smartphones. The SmartPass app is the software component of this service, which also requires a new SIM card with payment security built in.
Working in unison with the security on the SIM card, the app features a number of user-controlled protections, including a PIN for transactions of over AU$100 and a separate, optional pass code for locking access to the app. Transactions require the user to initiate the payment by using a virtual button on the SmartPass interface, limiting the risk of unintentional transactions occurring.
On top of these technical layers of security, all transactions are protected by Visa's Zero Liability policy.
Unlike existing virtual wallet systems that are available in other parts of the world, SmartPass does not directly associate a credit source with the user's account. Instead, customers choose to top up their SmartPass account with funds from any MasterCard or Visa credit card account. Automatic top-ups can be scheduled, or customers can manually top up their account.
Vodafone will pre-install the SmartPass app on new compatible smartphones from early next year. It estimates that 80 per cent of its range next year will be NFC ready, excluding the iPhone 5. Customers who already own NFC-enabled hardware can take up the new service by upgrading their SIM cards. Since the SmartPass account is associated with the SIM and not the handset, customers will be able to easily swap handsets and take their SmartPass accounts with them.