RIM gets Visa approval for mobile payments via NFC

Computerworld - Research in Motion announced Wednesday that credit card company Visa has approved RIM's security management system for use in mobile payments made with smartphones or tablets that use a Near Field Communication chip.

The system, called Secure Element Manager (SEM), provides software and server infrastructure in the cloud that is managed full-time globally by RIM, said Geoffrey MacGillivray, senior product manager for NFC services at RIM, in an interview. SEM works with the secure element installed in SIM (Subscriber Identity Module) cards or the embedded secure element installed in NFC-ready mobile devices.

The SEM is intended for use by wireless carriers to offer their device customers the ability to make mobile payments through banks that work with Visa and potentially other credit card companies.

SEM meets the "stringent technology and usability guidelines for Visa," RIM said in a statement. That includes encryption of mobile payment data, both on devices and over the air to banks, and the downloading of applets with a customer's credentials, as well as management of PINs and other authentication data used to activate a mobile payment, MacGillivray said.

A secure element typically works with encryption technology and manages credentials with a secure user PIN to seek authorization of a payment from a phone to a bank account on a remote server.

RIM said its SEM technology evolved from a recent deployment of mobile payments in Canada using SEM by EnStream, a joint venture of wireless carriers Bell, Rogers and Telus. MacGillivray said RIM has not disclosed other potential carrier customers of SEM.

RIM already makes BlackBerry 7 smartphone models with NFC chips and SIM cards, as do many Android smartphone makers such as Samsung and LG. BlackBerry 10 smartphones, due to be announced Jan. 30, will also have NFC chips and SIM cards.

Apple has so far held off deploying NFC in its devices.

In the U.S., the consortium of three wireless carriers called Isis has relied on a mobile payment system that requires a secure element in a SIM card. Isis, backed by Verizon Wireless, AT&T and T-Mobile, was rolled out in October in Austin and Salt Lake City.

For example, customers can purchase soft drinks from vending machines equipped with NFC readers by passing an Isis and NFC-ready smartphone near the machine, with the cost paid by a credit card or pre-paid card. Verizon demonstrated that technology at its booth at International CES last week.

By comparison, Google Wallet embeds the secure element for mobile payments in the core of the smartphone rather than on a removable SIM card. Google Wallet was introduced in the U.S. in September 2011 using a Nexus smartphone on the Sprint network and tens of thousands of NFC-ready payment terminals.

RIM's announcement will likely bolster interest in mobile payments in the U.S., where many device users have been cold to the NFC technology mainly because of security worries and a longtime habit of using credit cards to buy goods and services, analysts said.

In Japan and South Korea, smartphone users widely use their NFC-equipped devices to make low-cost mobile payments at retailers and for rides on public transit. The system first rolled out more than a decade ago amid broad cooperation between carriers and banks there.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His e-mail address is mhamblen@computerworld.com.

Read more about Mobile Payments in Computerworld's Mobile Payments Topic Center.