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Visa, Nokia Test RFID Cell Phones to Make Purchases

Visa International and Finnish cell phone maker Nokia Corp. (NOK) jointly released the world's first credit card payment pilot system in Malaysia, allowing consumers to shop and pay using their mobile phones.

The "Mobile Visa Wave Payment Pilot" project marks the first step in plans to turn mobile phones into electronic wallets for consumers, officials said.

It builds on the Visa Wave smart card technology that uses radio frequencies to eliminate the need to swipe a credit card into a reader.

Customers wave cards in front of the reader to make payments, similar to "touch and go" cards used in transport systems.

During the four-month trial period, 200 Visa Wave cardholders in Malaysia will be given a specially designed Nokia phone that can be used to make payments in 2,500 outlets nationwide that have Visa Wave readers, officials said.

"It's a natural progression. There are more mobile phones in the world today than plastic cards. We see this as a good marriage," said Paul Jung, Visa Asia-Pacific's regional head for emerging products and technology.

The Visa Wave payment system was introduced last year and there are now some four million such cards globally, mainly in the United States. This represents a small fraction of the 1.4 billion Visa brand cards worldwide.

In the Asia-Pacific region, Visa Wave is available in Malaysia, Taiwan and South Korea and will be expanded to Japan and Southeast Asia this year, Jung added.

Nokia's business development senior manager Risto Sipila said there is vast market potential for such services because mobile phone users worldwide are expected to surge to 3 billion by 2008, nearly half of the world's population.

"This new technology won't replace your wallet entirely but it is very promising because it will make life easier for everyone," he said.

He said the Nokia 3230 prototype phone to be used in the Visa pilot project is embedded with a chip using the latest cryptography, security and smart card technologies, making it highly secure and difficult to counterfeit.

If the trial is successful, the phone could be made available for commercial use as early as next year, he said, adding that Nokia is also working on developing more models for such usages.