Report: Next Windows Phone OS to tap mobile payments

Software giant is expected to include technology in its next mobile operating system that will turn phones into an electronic wallet.

Steven Musil Night Editor / News
Steven Musil is the night news editor at CNET News. He's been hooked on tech since learning BASIC in the late '70s. When not cleaning up after his daughter and son, Steven can be found pedaling around the San Francisco Bay Area. Before joining CNET in 2000, Steven spent 10 years at various Bay Area newspapers.
Expertise I have more than 30 years' experience in journalism in the heart of the Silicon Valley.
Steven Musil
2 min read

Microsoft is expected to include mobile-payment technology in the next version of the Windows Phone operating system that will allow users to turn their Windows phones into an electronic wallet, according to a Bloomberg report.

The first handsets featuring the technology could appear later this year, according to the report, which cited two unidentified people described as familiar with the plans.

Microsoft representatives did not immediately respond to a request for comment on the report.

With the move, Microsoft would join a growing list of software makers incorporating near-field communication (NFC) to turn consumers' smartphones into mobile wallets. The total value of mobile transactions is expected to reach $245 billion in 2014, according to market researcher Gartner.

NFC chips let devices exchange information wirelessly with one another over very short distances, about 4 inches. Users of phones featuring NFC chips could use them to make payments by holding the devices up to a specialized reader at retailers' checkout counters.

Earlier this week, The Wall Street Journal reported that Google would partner with MasterCard and Citigroup to deliver a mobile-payment service to Android smartphones. Google is also reportedly paying for the installation of thousands of NFC short-range, wireless point-of-sale systems from VeriFone at stores in New York and San Francisco.

Rumors have been circulating recently that the next version of Apple's iPhone would incorporate NFC, but some observers believe Apple would have to overcome some hurdles before it can do so. Those hurdles apparently rest more with the overall infrastructure and how Apple would partner with retailers and other players rather than the technology itself.

Research In Motion has also been considering NFC but has been running into conflicts with mobile carriers over who will control the mobile payment information, according to a recent Wall Street Journal story.

Later this year, Visa is expected to begin offering a way to use existing smartphones for such payments with a microSD (Secure Digital) removable memory card.