RIM stock up on Visa's approval of secure mobile payment method
An employee walks past the Research In Motion company logo in front of one of their many buildings, in Waterloo, Ontario on Friday, June 29, 2012. (Dave Chidley / THE CANADIAN PRESS)
Published Wednesday, January 16, 2013 8:38AM EST
Last Updated Wednesday, January 16, 2013 3:33PM EST
TORONTO -- BlackBerry users will soon be able to charge purchases at the cash register to their Visa cards using technology implanted in the company's new smartphone models.
Research In Motion said Tuesday that Visa has given the green light for its credit card system to work using the smartphone maker's encrypted mobile payment technology. The payment method securely links BlackBerrys to bank accounts and credit cards.
The announcement makes RIM a prominent player in the growing market for mobile payments, which is still in its infancy.
RIM's payment technology lets customers use their smartphones like bank cards. They can pay for items by holding it up to a sales terminal, which makes it identical to the chip that's implanted in most credit cards.
"Any place you can tap your credit card you can now tap your mobile phone," Geoffrey MacGillivray, manager of services security and payments at RIM, said in an interview.
Visa's approval builds on a partnership between RIM and Canada's three biggest wireless networks through their EnStream joint venture, which is also part of the security infrastructure that would make the payment method work at checkouts.
Under the EnStream agreement, RIM will manage security credentials for SIM cards in BlackBerrys and devices running both Google's Android and Windows operating systems.
Visa's announcement also opens the door for other credit card companies to partner with RIM, though MacGillivray said those negotiations are still underway.
Shares of RIM rose 2.94 per cent on Wednesday afternoon, or 42 cents, to $14.69 on the Toronto Stock Exchange, coming off a six per cent gain earlier in the session.
The jump follows two days of big gains for the stock, which closed at $11.79 last Thursday.
Visa's approval comes as RIM puts the finishing touches on the unveiling of its new BlackBerry smartphone models on Jan. 30.
Using a smartphone to make a payment is considered one of the next waves of wireless technology in North America, driven by the growing number of credit cards, rewards programs and identification that many people carry.
At this point, most smartphone users are limited to using barcode technology in their phone's apps to pay at retailers like Starbucks or to rack up loyalty points at various retailers.
Newer BlackBerry smartphones, including the latest models in stores, have the ability to make mobile payments as do some phones using the Android operating system. The new iPhone 5, however, does not have Near Field Communication short-range wireless technology to link to credit card information.
The company is hoping to use that reputation and a new generation of BlackBerrys to reclaim market share lost to Apple's iPhone and Android-based smartphones.
Research In Motion describes its Secure Element Manager technology, or SEM, as a way for networks to manage all types of mobile devices equipped for close-range wireless payments, also known as near field communications or NFC.
The EnStream joint venture owned by BCE's Bell (TSX:BCE), Rogers (TSX:RCI.B) and Telus (TSX:T) has already begun to deploy mobile payments in Canada using the RIM SEM technology.
"The approval from Visa of RIM's SEM solution is an important step in that it will enable carriers to support Visa issuing banks and financial institutions," said Frank Maduri, a RIM senior director responsible for mobile payment services.
"We now offer carriers a robust solution with around-the-clock global support that works on any NFC-capable device, and meets the stringent technology and usability guidelines for Visa."