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from the L.A. Times

Category: Near field communication

Visa announces digital wallet for paying online or by waving a phone

Visa said Wednesday that it would roll out a digital wallet service this fall that can be used to buy things online or with the wave of a smartphone.

The San Francisco company, which is the world's largest processor of credit and debit card payments, its digital wallet will be first launched in the U.S. and Canada, with the cooperation of major card issuers, banks, credit unions and retailers.

The digital wallet will store Visa and non-Visa accounts and support near-field-communication payments with smartphones compatible with Visa's payWave scanners installed in retail locations. PayWave, already found in some stores, allows users to wave a special keytag or computer-chip equipped credit card over a scanner to pay for goods or services.

Visa said its digital wallet would be able to handle payments online, using a phone, on social networks and person-to-person payments as well.

The digital wallet will also include a "click-to-buy" option, which will work with online retail websites to allow users to pay by "entering an email address, alias or online ID and password, instead of a billing address, account number and expiration date," Visa said in statement. 

Among the financial institutions Visa said it was working with on the digital wallet are Barclaycard US, BB&T Corporation, Card Services for Credit Unions (CSCU), ICBA Bancard, First Financial Bank of Ohio, Nordstrom, Pentagon Federal Credit Union, PNC Bank, PSCU Financial Services, Regions Bank, Royal Bank of Canada, Scotiabank, TD Bank Group (in the U.S. and Canada) and US Bank.

In response to Visa's entry into the digital wallet space, PayPal said it had spent years doing what Visa was looking to build.

"It's clear that the payments industry is starting to look more and more like PayPal," Sara Gorman, a PayPal spokeswoman, said in a statement. "PayPal was built 12 years ago, because traditional payment methods weren't designed for the digital world. We're light years ahead: More than 98 million people around the world have already trusted us with their digital wallets." 

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-- Nathan Olivarez-Giles

twitter.com/nateog

With Android@Home Google wants your house to be as smart as your phone

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Google kicked off its annual two-day conference for software developers by launching headline-grabbing movie and music services.

But it also announced a more futuristic project at Google I/O called Android@Home. The idea: To make your home as smart as your phone.

So far Google has used Android as an operating system for phones and tablets. Now it apparently has an ambitious plan to turn the home into one giant connected device.

Google wants consumers to be able to control devices and appliances in their homes with their Android devices, which would basically function like a universal remote.

Want to turn off the lights? Use your Android phone. That's what Google did during an on-stage demonstration on Tuesday. Lighting Science Group is building wireless lighting products -- bulbs and switches that can communicate with Android -- that should be available in stores by the end of the year.

Making Google's vision of an Android-automated home a reality will depend on the 5,000 software developers who are attending Google I/O. Google said it wants them to begin building applications to automate houses.

To get the creative juices flowing, it showed off a new home theater system called "Project Tungsten," which allows users to stream music from Google's new service to speakers connected to the Android home network. A user can upload music by tapping a CD case equipped with a near field communication device on a Tungsten device. Tap it again and the music plays.

Google said it plans to release the protocols for Android@Home later this year.

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-- Jessica Guynn

ACLU concerned over Michigan State Police extracting data from cellphones

Cellebrite

Michigan State Police officers, equipped with forensic cellphone analyzers, have extracted data from cellphones during their police work, and the American Civil Liberties Union wants to know more about it.

The ACLU has raised concerns over the legality of the cellphone scanners (which can scan both regular cellphones and smartphones) and whether the 4th Amendment, which prohibits unreasonable searches and seizures, is being violated by the state police.

In a letter to the Col. Kriste Etue, the director of the Michigan State Police, the ACLU alleged that the agency has used such cellphone analyzers, called the Cellebrite UFED, in the field and has taken data from phones.

"The 4th Amendment protects citizens from unreasonable searches," the letter said.
"With certain exceptions that do not apply here, a search cannot occur without a warrant in which a judicial officer determines that there is probable cause to believe that search will yield evidence of criminal activity.

"A device that allows immediate, surreptitious intrusion into private data creates enormous risks that troopers will ignore these requirements to the detriment of the constitutional rights of persons whose cellphones are searched."

The ALCU said that it has asked for data from the police agency, known as the MSP, detailing how the devices are used, when they are used and if they have been used without the permission of those who own the phones or computers being scanned.

But the MSP has either denied knowing whether the requested information exists or asked for hundreds of thousands of dollars to turn the data over, the ACLU said in its letter to the agency.

"For more than two and a half years the ACLU of Michigan has attempted to obtain information about the use of these devices through the Michigan Freedom of Information Act," the ACLU letter said. "Specifically, we have asked for records, reports and logs of actual use. The MSP's estimated cost of $544,680 for retrieval and assembly of these documents for the entire period that five of these devices have been in the MSP's possession is, in our view, extraordinarily high.

"In fact, we were told that no part of that set of documents would be provided unless we agreed to pay a $272,340 deposit."

The ACLU said that it has filed nearly 70 records requests for the use of two of the devices for shorter time periods, in an attempt to narrow the scope of the data request and make it easier to get -- but still, the MSP hasn't handed over any information.

"We were told in each case that there were either no documents available for the period we identified, or that we would be required to pay in advance for MSP personnel to ascertain whether requested documents exist," the ACLU said.

After the ACLU of Michigan posted the letter on its website and a few news outlets covered the story, the Michigan State Police issued a statement on the data extraction devices, which it calls DEDs.

"The MSP only uses the DEDs if a search warrant is obtained or if the person possessing the mobile device gives consent," said Tiffany Brown, a state police spokeswoman, in a statement. "The department's internal directive is that the DEDs only be used by MSP specialty teams on criminal cases, such as crimes against children."

Brown said the DEDs are not being used to extract anyone's personal information during routine traffic stops.

"The MSP does not possess DEDs that can extract data without the officer actually possessing the owner's mobile device," she said. "The DEDs utilized by the MSP cannot obtain information from mobile devices without the mobile device owner knowing."

Brown also said the DEDs the agency is using have been adapted for law enforcement use because of an increasing use of such devices by criminals to steal data from others, noting that such technology has become "a powerful investigative tool used to obtain critical information from criminals."

The ACLU said the MSP has refused to help narrow the records requests to get data on the devices and their use by police, a claim that Brown denied.

"Since 2008, the MSP has worked with the ACLU to narrow the focus, and thus reducing the cost, of its initial Freedom of Information Act (FOIA) request," she said. "To date, the MSP has fulfilled at least one ACLU FOIA request on this issue and has several far-lower cost requests awaiting payment to begin processing."

The dust-up between the ACLU and the Michigan State Police has led to false information being spread by the media, Brown said.

"The implication by the ACLU that the MSP uses these devices 'quietly to bypass 4th Amendment protections against unreasonable searches is untrue, and this divisive tactic unjustly harms police and community relations," she said.

ACLU of Michigan officials were not available to comment on the MSP's statement on Thursday.

Officials at Cellebrite, the company that makes the data extractors the MSP has used, were also unavailable for comment. But the Glen Rock, N.J., company's chief executive, Aviad Ofrat, did post a short statement on the firm's Facebook page, saying "Cellebrite is not authorized to discuss any customers' use of our products or technology."

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 Image: A Cellebrite UFED mobile forensic cellphone data extractor. Credit: Cellebrite

Sprint to launch wave-and-pay service in 2011, before AT&T;, T-Mobile and Verizon

Sprint phones

Sprint Nextel is looking to beat AT&T, T-Mobile and Verizon to market with a service coming this year that will enable people to buy goods with their smartphones.

Kevin McGinnis, Sprint's vice president of product platforms, told Bloomberg that the telecom company was working with payment networks and smartphone manufacturers on the near-field communication features.

Customers would use the feature by tapping their phones on or waving their phones in front of scanners in retail stores, McGinnis told Bloomberg.

Sprint, the third-largest mobile carrier in the U.S., is hoping to make its service available before the near-field communications joint venture among AT&T, T-Mobile and Verizon, known as Isis, hits the market. Isis was announced last November and is expected to launch in 2012, Bloomberg said.

"We intend to make this an open solution where consumers can use their phone in a variety of physical locations," Sprint's McGinnis told Bloomberg. "Because we're allowing other brands and other institutions to participate, they can also tell their consumers that this is available on Sprint."

Isis plans to take a percentage of each purchase made through the service, but Sprint isn't looking to do the same, he told Bloomberg.

Rather, Sprint may take a share of purchases made with digital coupons available through its service, or it may take revenue from targeted advertisements that interact with a consumer's phone, McGinnis said. Purchases made through Sprint would show up on credit card statements, not phone bills, Bloomberg said.

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Photo: A Sprint BlackBerry phone at a Sprint store in Woodmere Village, Ohio. Credit: Tony Dejak / Associated Press

Will iPhone 5 have NFC 'contactless' capability? [Corrected]

Multitasking-voip-20100607 Among the hottest debates swirling on the Web about Apple's forthcoming iPhone, dubbed the iPhone 5, is whether it will or won't include a wireless technology called Near Field Communication (NFC).

NFC, which allows for "contactless" communication between phones and special readers, has been touted as a technology with a vast array of practical applications. One use much bandied about is "tap and go" pay with smartphones, which could eliminate the need for a bulky billfold full of credit cards. Another is "tap and go" on buses and subways (no more scrambling around for your pass as the train pulls away).

Enthusiasts have even suggested a world in which movie posters and restaurant menus are tagged with additional information available to the curious with a wave of their phones. So when a recent article in the U.K.'s The Independent, citing anonymous sources, reported that Apple decided not to include NFC chips in the latest iteration of its yet-to-be-released iPhone, the news caused something of an Internet frenzy.

That news was countered Thursday by a Forbes blog post which said the jury was still out on Apple including NFC and cited an anonymous entrepeneur with a friend who works at the always-secretive tech company.

Of course, there's always the chance that an Apple employee will tie one on and leave another iPhone prototype in a Silicon Valley bar. Last spring, Apple engineer Gray Powell forgot an unmarked iPhone 4 prototype in Redwood City. The student who found it ultimately sold it for $5,000 to gadget blog Gizmodo.

Correction: Earlier post incorrectly identified the Apple engineer as Robert Powell.

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Photo: iPhone 4. Credit: Apple.


Google planning mobile payment test in San Francisco, New York

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Google has been hinting for months that it will roll out a mobile payment service so that shoppers can ring up their purchases with their smart phones.

Now people familiar with the project are whispering to Bloomberg News that Google will begin testing the service at stores in San Francisco and New York in the next four months by installing thousands of cash register systems from VeriFone Systems.

The technology -- called near field communication, which transmits signals over short distances -- would let shoppers ditch cash or plastic (or even loyalty and gift cards and coupons) and check out by tapping a smart phone against a register.

Caveat: Bloomberg hasn't always gotten it right when it comes to NFC. It reported earlier this year that Apple's iPad 2 and iPhone 5 would include NFC. There is no evidence of the technology in the iPad 2 and the latest reports indicate that there won't be any NFC in the iPhone 5, which will probably be released this summer.

Google, which has taken a leading role in the mobile phone industry with its Android operating system that it offers for free to handset manufacturers, has been pushing for NFC-equipped phones, although there aren't many such Google devices out there yet.

Google's Eric Schmidt showed off what was presumed to be Samsung's Nexus S phone in November at the Web 2.0 Summit before the phone that allows NFC transactions was released. At the time he predicted that mobile phones would eventually replace credit cards.

"People don't understand how much more powerful these devices are going to be," Schmidt said. But he cautioned not to expect the technology to roll out quickly.

"I expect to be carrying my credit cards around for quite some time," he said.

Mobile payment is already a hotly contested market with a growing number of companies including EBay's PayPal and ISIS, an effort backed by AT&T and Verizon Wireless that will use Discover Financial Services to handle payments.

Google has demonstrated how the latest version of its Android operating system -- code named Gingerbread -- has mobile payment capability. And in Portland, Ore., Google has been experimenting with NFC window decals that, when tapped with a smart phone, give additional information about the business, including special offers and deals.

Not to mention that if Google were to get a significant foothold in mobile payment, its Checkout payment system would get a welcome boost.

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Apple iPhone 5, iPad 2 could have wave-and-pay features

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The next Apple iPhone might include features that could enable users not just to make phone calls but also to make purchases with their phones.

Buying a pair of jeans with an iPhone, a cup of coffee with an iPad or maybe movie tickets on a Droid could be an option in the near future.

And all it may require is pulling out a smart phone, or tablet, and waving it above a receiver or scanner -- as opposed to sliding a debit or credit card, or trading good ol' cash and coin.

Multiple reports have come out today citing various sources on Apple Inc.'s supposed plans to include "near-field communication" features in the iPhone 5, which is expected to hit stores this summer.

Apple, for its part, is declining to comment.

Speaking to Bloomberg, analyst Richard Doherty of Envisioneering Group said the next iPhone and future iPads could be used to make purchases by transmitting financial information to receivers in stores over a distance of as much as 4 inches. Doherty cited Apple engineers working on such hardware for his information.

The iOS-device features could access a user's iTunes gift card info or credit-card and bank data, Bloomberg reported.

If Apple were to add such abilities to its mobile products, it could not only help the Cupertino company tap into a $6.2-trillion pool of money that U.S. consumers spend each year but could also enable the company to cut out credit-card processing fees on every purchase currently made through iTunes, the report said.

The Financial Times ran a similar report today about pay-by-phone features coming to the iPhone, citing "Asian suppliers and others who have been in talks with Apple."

The report also noted that BlackBerry maker Research in Motion, as well as smart-phone and tablet competitors that use Google's Android operating system, are also adding near-field features into upcoming devices.

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Photo: A visitor inspects an Apple iPhone 4 at the Apple Worldwide Developers conference in San Francisco in June. Credit: Justin Sullivan / Getty Images

AT&T;, T-Mobile and Verizon partner on Isis mobile payment project

AT&T, T-Mobile and Verizon Wireless want to replace your wallet with a smartphone. 

The companies, three of the country’s largest mobile carriers, are partnering to create a national “mobile commerce network” to allow customers across the country to make purchases with just a wave of an iPhone or Android.

The Isis project, announced Tuesday, will be headed up by Michael Abbot, a former financial executive with GE Capital.

The Isis setup would tap smartphone and near-field communication technology, which passes encrypted information between devices at close range but doesn't require contact.

That differs from technology from VeriFone or Square, which use accessories that can read a physical credit card. The companies behind Isis said they are developing security and privacy safeguards.

“While mobile payments will be at the core of our offering, it is only the start,” Abbot said in a statement. “We plan to create a mobile wallet that ultimately eliminates the need for consumers to carry cash, credit and debit cards, reward cards, coupons, tickets and transit passes.”Credit card

Over the next year and half, the venture will be rolled out in “key geographic markets,” the companies said, eventually becoming available to all merchants, banks and wireless service providers.

Isis will be hooked up with Discover Financial Services’ payment network -- currently offered by more than 7 million U.S. merchants. Barclaycard US is expected to be the first issuer.

The mobile payment system is already popular in countries such as Japan. Card issuers such as Visa and Mastercard have also been testing options that would likely compete with Isis.

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Photo: Square, a credit-card reader made for smartphones, is plugged into an Apple iPhone. Credit: Jin Lee/Bloomberg

Google's Eric Schmidt shows off mystery Android phone, talks mobile payments

Google envisions that Android phones will one day replace credit cards, its chief executive said Monday as he showed off a prototype of a mobile phone running a new version of Android.

This new version of Google's mobile operating system, which has the code name "gingerbread," will be out in a few weeks, CEO Eric Schmidt said at the Web 2.0 Summit in San Francisco. It will include near-field communication technology that could one day turn your smart phone into a digital payment system, he said: Basically, the phone contains a chip that lets you tap it to prompt real-world interactions, which in the future could include paying for something.

"People don't understand how much more powerful these devices are going to be," Schmidt said. But he cautioned not to expect that particular technology to roll out quickly.

"I expect to be carrying my credit cards around for quite some time," he said.

Schmidt demonstrated the technology while on stage. He bumped the phone to wake it up so it could pinpoint his location and provide information about the hotel where he was speaking. The camouflaged phone was "an unannounced device that I carry around with me," he said.

Tech observers are speculating that the mystery phone is the next Nexus -- the successor to the Nexus One, Google's Android phone -- called the Nexus S by Samsung. Schmidt would not give any details about the phone, but hinted that a Nexus One successor could be in the works. When asked about previous comments downplaying the possibility of a second Nexus, Schmidt said: "I said there would never be a Nexus Two."

The near-field communication chips transmit signals over short distances. That gives smart phones the ability to be used in place of credit cards, for example, by broadcasting data to devices that speak the same language. For example, in a store, you could "bump" your phone on an NFC sensor and pay for your purchase without having to open up your wallet.

A number of companies, including EBay's PayPal and Jack Dorsey's Square, are developing technologies that let people tap or swipe their phones to make purchases. Google has been hinting at its growing interest in commerce. The Internet search giant is said to be about to roll out online women’s fashion boutiques.

Schmidt said that mobile payments are promising because the technology reduces the risk of fraud. "The credit card industry thinks the loss rate is going to be much better," he said.

-- Jessica Guynn


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