Venyon: Nokia’s push at mobile payment

Infoworld:

Nokia (NYSE: NOK), one of the first handset makers outside Japan to turn a phone into a wallet, now wants to sell services that will make these kinds of devices useful.

But the Finnish mobile equipment giant isn’t doing so directly. Instead, it has formed what it calls an independent third party, a joint venture with Germany’s Giesecke & Devrient, which makes smart cards. The venture, Venyon Oy, based in Helsinki, was launched in December and is about to open a Singapore office to complement locations in Munich and Dallas, according to Chief Executive Officer Lauri Pesonen.

The mobile phone payments Venyon wants to facilitate are based on NFC (near-field communication), which uses an RFID (radio-frequency identification) chip and antenna to exchange information with a payment station from a range of a few centimeters. Typically it would involve tapping the phone against a subway turnstile, a vending machine, a payment device at a checkout stand, or another phone, Pesonen said.

Phones are perfect for payment because people carry them almost everywhere, Pesonen told journalists at an event in San Francisco on Wednesday. NFC is already available on some credit and debit cards, and NFC phones will get cheaper when they no longer need a separate smart card for the feature. Such phones should hit the market next year, he said.

Venyon isn’t aiming at the hardware end of the problem but at the need for an infrastructure through which retailers and financial services companies can work with carriers and handset makers. Although standards bodies are working on specifications for this, Venyon is worried that the market will be in full swing by the time those standards are finished. If each set of partners develops its own technology, fragmentation would slow down adoption, Pesonen said.

NFC is going to take quite a while to hit mainstream America. I can’t wait for that day to happen.