BARCELONA, Spain —
Visa, the global payments network, announced a coup at the show: it has struck a deal with Samsung Electronics to take charge of the "secure element" in the next flagship phone from the South Korean company. The Galaxy S IV is expected to be launched at an event in New York on Mar. 14, though the name has not been confirmed.
The "secure element" is sort of like a safe inside the phone. Whoever controls access to it decides which credit cards, transit passes or other verified "documents" the phone can store. A bank that wants to let customers use their Samsung smartphones as virtual credit cards will have to go through Visa.
Control of the secure element is a crucial battleground for NFC. The GSMA, which is dominated by cellphone carriers, advocates putting the secure element not in the phone itself, but in the subscriber identity module, or SIM card, which plugs into the phone to identify the user and supply a phone number to the network. SIM cards are issued and controlled by the carriers who would like to be the ones in control of the secure element.
While Visa, phone companies and Google (which has its own payment initiative) duel over the secure element, eBay Inc.'s PayPal is wondering what all the fuss is about. The online payment network thinks NFC is a lot more trouble than it's worth. The company isn't afraid to say so at the wireless industry tradeshow.
"If you want to change something, you have to solve problems that people have in everyday life," said David Marcus, the president of PayPal. "It's not like everyone is thinking 'Oh, I wish someone came up with something better'" than paper money and credit cards.