Mobile Phones: A Key Player in Proximity Payment Systems
Michael L. Kasavana, NAMA endowed professor in hospitality management at Michigan State University, writes for AMonline about the evolution of vending machines to support contactless proximity payments.
While MasterCard, Visa and American Express have actively pursued contactless payments via stand-alone RFID technology, Discover Financial Services (Discover Card) has taken a different approach. The company is experimenting with contactless payments via cell phone and anticipates having the product in the marketplace by mid-2006. The cell phone, equipped with a NFC chip and antenna, enables consumers to settle purchases with the wave of the handset. In addition, the phone can also be used to review account balances and transfer funds between cardholder accounts using a secure PIN code.Discover relies on NFC technology to send and receive data. With the ability to share data, a consumer could purchase two movie tickets via an NFC-enabled phone, then transfer one of the tickets to a friend's NFC phone, thereby allowing each to simply wave the phone near a reader to gain entry to the show. Moving "tap and go" from cards, tags and fobs to cell phones is the next logical progression in the proximity payment technology evolution.
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