Visa Unveils Wireless Bill Payment Partnership

Visa International announced Wednesday that it will join with wireless data services provider Aether Systems, Inc. (Nasdaq: AETH) to create a new Wireless Application Protocol (WAP) standard and to develop new ways for customers to make purchases and receive bills over wireless devices.

The announcement comes one week after MasterCard disclosed plans to invest $5 million (US$) in the Massachusetts Institute of Technology Media Lab to develop new ways for mobile device users to pay for everything from vending machine items to big-ticket items at retail stores.

Rise of M-Commerce

Both announcements point to the rapidly growing importance of mobile devices for e-commerce. Last month, International Data Corporation (IDC) said that by mid-2001, all of the mobile phones and handheld devices sold worldwide would be WAP-capable, allowing for widespread Internet access and secure e-commerce.

Echoing that belief, research firm GartnerGroup predicts that at least 40 percent of business-to-consumer e-commerce transactions outside North America will be initiated from mobile devices by 2004.

Mobile Bills and E-Wallets

“M-commerce solutions have the potential to push the retail and financial marketplaces into entirely new areas,” said David Oros, Chairman and CEO of the Maryland-based Aether Systems.

In the Visa deal, Aether will help the credit card company and its member banks develop methods for electronic presentation and payment of bills on mobile devices. Aether will also create new point-of-sale products.

The initial offering — expected mid-summer — is likely to be an e-wallet, a service that allows users to register and provide payment information once, and then shop at multiple online outlets using the same account.

Infrared Transponders and Biometrics

Meanwhile, MasterCard is hoping its support of the Media Lab will give it in the inside track on new developments in wireless payment services. The donation to MIT also links the credit card company with the university’s new e-business program at the Sloan School of Business.

Nicholas P. Negroponte will oversee the Media Lab project, which will focus on using remote devices, such as infrared transponders, to automatically record purchases at toll booths and vending machines, and eventually at retail stores. The lab will also look into long-range methods of assuring the true identity of a shopper through biometrics.

“Buying and selling is an essential part of our everyday lives. Making the process more flexible, more convenient and more secure will have benefits to both consumers and businesses,” Negroponte said.