Mobile Payment Magazine

Embracing Emerging Technologies – US Retailers Face a “Double Whammy”

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By John Rozek —
With most regions in the world already adopting EMV – or Chip and PIN – payment solutions, there is now tremendous pressure on the US to join the likes of Canada, the UK and the rest of Europe in adopting this more secure technology, in order to combat increasing levels of customer-present fraud. The question is no longer will EMV will hit US shores, it’s when.

The introduction of EMV, a global standard for inter-operation of integrated circuit cards (IC cards or “chip cards”) and IC card capable point of sale (POS), is a significant change for US retailers, and one which will affect them greatly; it is not surprising, therefore, that many are nervous about the move.

Cost of Implementation

Undoubtedly, one of the most significant impacts on the country’s retailers will be cost and technical complexity of implementing and running EMV solutions. The implementation cost alone can be very significant and includes the software upgrade, the purchase of PIN pads and the cost of accreditation. Retailers running their own payment systems will face much higher costs. Not only will they need to ensure that they have technical staff who are skilled in both EMV and their chosen vendor’s solution, they will also need to bear the cost and effort of PCI DSS (Payment Card Industry Data Security Standard) accreditation. These retailers will, however, benefit from greater control over their point of sale processes and will be able to architect their payment infrastructure to ensure the fastest possible transaction speeds–a key feature for multi-lane supermarkets in particular.

Larger retailers will be able to absorb these costs. Others, however, may find that the cost of running their own systems becomes excessive once EMV is introduced. This will almost certainly be the case for small and mid-size retailers and may even be true for some larger retail organisations. When EMV was introduced to the UK in 2003 we saw a lot of retailers move towards hosted solutions; we can probably expect to see similar trends in the US.

To Host or Not to Host

Retailers who go down this route have two options–a hosted solution, or a shared hosted solution. A hosted solution is where a merchant processor runs a retailer’s payment system on their behalf. This still allows the retailer to retain many of the benefits of running their own system, but greatly reduces the cost and effort associated with PCI DSS accreditation. A shared hosted solution, on the other hand, is a low cost, ‘pre-accredited’ solution that is shared by several retailers. Pre-accredited means that the solution was approved when it was first introduced and new retailers can be added to the service with minimal formality.  It allows retailer to accept payments in the simplest and cheapest possible way.

Forward Planning

Whichever route they choose, US retailers will face some significant challenges over the next couple of years. In many ways they are in a better position than the early adopters of Chip and PIN; the technical standards behind EMV are much more mature and are now well understood, and expertise in this area is plentiful. On the other hand, with interest in mobile payments continuing to rise, the US retail market faces a double whammy.  Not only do retailers have to start thinking about implementing EMV solutions, they also need to carefully plan their payments infrastructure so that they are able to embrace emerging technologies. The key to success is most definitely careful planning. Retailers need to start thinking now about how they react to these changes and they need to do this sooner rather than later.

About John Rozek

John Rozek

John Rozek of payment consultancy, Polar Moment.

John has over 18 years of experience working at the forefront of the payments industry. Working with Royal Bank of Scotland and NatWest, John led an industry leading cross-border implementation and ATM service delivery programme. He also led the team that introduced Chip and PIN to over 120,000 points of sale across UK. John was one of the founding members of Polar Moment and has played a key role in developing the organisation to become a leading provider of payments consultancy. He is a recognised name across the sector, delivering payment industry consultancy and business development services.

Western Union Launches New Foreign-Exchange Payment Service Via Mobile

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The Western Union Company has introduced a new foreign-exchange (FX) payment service that will enable small and medium-sized enterprise (SME) business clients to make payments from their smartphones.

The new mobile-friendly payment service is now available in countries where Western Union currently offers online payment and FX services through its Business Solutions division, including the United States, Canada, the United Kingdom, Germany, Italy, France and Australia.

The new mobile service is designed for busy professionals and offers an intuitive interface for customers making international business payments. The service, which offers more than 140 currencies to choose from, allows users to make payments to suppliers in global markets anywhere, anytime, and lock in a currency-exchange rate and fee before transferring funds.

“The sheer demand for innovative mobile services is evident, and our clients want to take advantage of new m-payment options,” said Raj Agrawal, General Manager, Western Union Business Solutions. “This new mobile payment service not only makes it easier to transfer funds globally to foreign suppliers and workers but also offers the ability to take advantage of foreign currencies when making international payments.”

According to an IEMR Global Mobile Payment Market Forecast report, mobile payments will reach 1 billion users and the $1 trillion transaction mark in the next five years. To take advantage of this growing market opportunity, this service will allow Western Union Business Solutions clients and partners the ability to take advantage of diverse foreign-exchange payment solutions that are flexible and easy to use.

Source: Business Wire

Intuit to Develop Mobile Payment App for Android 3.0 Honeycomb

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Intuit GoPayment, which lets anyone who sells products or services get paid via mobile devices, is one of the first mobile payment apps being developed for Android 3.0, Honeycomb.

Building on the capabilities of Honeycomb, GoPayment allows people and businesses selling products or services to process credit card payments no matter where they are–on the road, in a store or at their home.

GoPayment for Honeycomb lets users:

  • Take photos of frequently sold items – Using a device’s camera, save time by photographing products and storing details to create a visual product list to quickly take customer orders.
  • Drag and drop frequently sold items from a product list – Quickly complete a sale by dragging and dropping items into the shopping cart and easily add or delete items as needed.
  • Work within an easy-to-view, large-screen environment – Easily view transactions and work faster when processing payments on a tablet.
  • Find data quickly – Find items in a product list or locate past transactions using new search capabilities. Authorize transactions with touch screen signature – For added security and professionalism, customers can quickly sign a tablet’s touch screen to authorize their transactions.
  • Swipe cards within seconds – Save time and money by swiping a card instead of entering numbers manually with support for a variety of credit card readers. All compatible card readers also encrypt the credit card data for added protection.

“We are excited about bringing one of the first mobile payment apps to Honeycomb,” said Chris Hylen, vice president and general manager of Intuit’s Payment Solutions division. “We are continually looking to support the newest mobile platforms and devices so that more people can start taking credit card payments no matter where they are.”

Availability and Pricing

Intuit will publicly demo GoPayment for Honeycomb at Mobile World Congress in Barcelona, Spain, from Feb. 14 to 17 at the Android booth. GoPayment for Honeycomb is expected to be available this spring on Android Market.

The GoPayment app is free and offers various pricing plans including no monthly fees and a free Intuit Credit Card Reader for people who are just getting started. For those who frequently process credit cards, there is also a plan with lower rates for higher-volume processing. GoPayment has no set-up, cancellation or gateway fees.

More information: GoPayment

Source: Business Wire

ProPay Releases Mobile Payment App for Smartphones

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ProPaym which provides merchant services, end-to-end payment security, credit card processing, and electronic payment services, has introduced its new social mobile payment (m-payment) platform, provisionally named Zumogo,  during the 2011 Sundance Film Festival.

Zumogo is a mobile payment application that facilitates payments and bi-directional communication between merchants and their consumers, allowing customers and businesses to connect. With Zumogo (pronounced “Zoo-MOE-Go”), businesses can market to new and existing customers and improve operating efficiencies, while customers can communicate with and make payments to businesses — all through a smartphone.

“The mobile payment movement is definitely in full gear and ProPay is excited to be at the forefront,” said Chris Mark, Executive Vice President of Emerging Markets at ProPay. “Not only does Zumogo allow consumers to connect with and pay merchants in an entirely new way, it does so in a manner that protects the sensitive payment data. Zumogo combines data security with the flexibility of mobile payment options, and the connectedness of social media, giving merchants and consumers the best aspects of each.”

The application provides benefits to both consumers and businesses. Consumers no longer need to carry all of their payment cards with them to make a payment. They can locate nearby Zumogo merchants, and even announce themselves to the merchant and ask questions via Zumogo’s chat function. Businesses can more efficiently service their customers while developing a deeper relationship with them. In addition, Zumogo can enable businesses to expedite the payment and checkout processes, allowing them to more efficiently serve their customers.

Zumogo leverages ProPay’s PCI DSS-compliant ProtectPay system, which combines end to end encryption and tokenization to secure payment data, and no sensitive data is exchanged between the merchant and the consumer.

According to Gary Goodrich, ProPay’s Chief Executive Officer, “Our new social m-payment platform demonstrates our commitment to leading the industry in both innovation and in the protection of consumer data. The addition of this mobile payment application to our existing product suite is a natural evolution of our secure payment services, and we’re excited to introduce it to our merchants.”

Zumogo is currently available on the Android Market and the iPhone App Store, and  will be available for the Windows Phone 7 platform by the end of the first quarter 2011.

Source: MarketWire

Visa and Wireless Dynamics to Introduce iPhone Contactless Payment Solution for Europe

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Visa Europe and Wireless Dynamics Inc. have developed a mobile contactless payment solution that will bring Visa contactless payments to iPhone users across Europe.

The solution relies on Wireless Dynamic’s iCarte accesory. iPhone users simply attach the Wireless Dynamics iCarte, available through their bank or mobile operator, to their iPhone and download the companion Visa Mobile application for iCarte App from the App Store.

The iCarte accessory contains an antenna and an embedded Secure Element where the Visa mobile card is safely stored. This “card”, in turn, works with an app from the App Store to enable payments on the iPhone. Once the Visa mobile card is activated, consumers can start making purchases by simply launching the app and touching their iPhone on any contactless-enabled point of sale terminal across Europe, without the need to enter their PIN.

The iCarte accessory is designed to equip iPhone users with the tools they need to buy goods using mobile contactless technology from a growing number of European retailers. Visa Europe’s first deployment has been launched in collaboration with Yapi Kredi bank and Turkey’s largest mobile operator, Turkcell. Yapi Kredi customers equipped with a Turkcell mobile plan will be the first who can purchase directly from their iPhone at 40,000 contactless point of sale terminals in Turkey using their iCarte payment accessory.

The product is also being used in the UK with Visa staff in London with partners FIS, a leading provider of prepaid platforms, and Coventry Building Society. To further commercialize the accessory, Visa Europe will engage its member banks and partner mobile operators in Italy, France, Poland, Spain, Switzerland, Turkey and the UK, all of which have rapidly maturing contactless payment infrastructure.

Sandra Alzetta, SVP, Head of Innovation at Visa Europe said: “It’s clear from trials across Europe that mobile contactless payment is a strong and compelling customer proposition. Visa recognizes that consumers who use smart phones like iPhone are more likely to be early adopters of advanced payment technology. Given that the availability of a wide range of mobile devices supporting contactless services remains a key hurdle for take-up, we are overcoming this obstacle by bringing the capability to the iPhones already in their pockets.”

Ambrose Tam, President and CEO at Wireless Dynamics commented: “Working with Visa Europe to commercialize our iCarte accessories is a leap forward in increasing the number and types of mobile payment solutions. We’ve worked hard to design and build a feature-rich and appealing product for our partners and iPhone users across Europe.”

Recent consumer research of 4,200 people across Turkey, the UK, Italy and Poland confirms strong consumer demand for mobile contactless payments with 41 per cent of respondents stating that they “definitely would” or “probably would” sign up to use Visa mobile payments. Critically, this percentage increased to 57 per cent when directed to iPhone users, which demonstrates that the device is the ideal cross-over of target mobile users and consumers with positive attitudes to new payment technologies. The research also indicated that 87 per cent of this iPhone users surveyed would be willing to use an accessory to enable their device for mobile contactless payments.

The Wireless Dynamics iCarte accessory is compatible with iPhone 4, iPhone 3GS and iPhone3G on iOS 3.1 or higher. The iCarte Secure Element can be associated with multiple Visa accounts.

Source: Wireless Dynamics, Inc.

FaceCash Mobile Payment Uses Photo for Added Security in Mobile Payment System

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FaceCashCombining barcode technology and  a smartphone app, along with a photo-security feature, Think Computer Corporation’s FaceCash mobile payment system lets consumers pay for items at the point of sale, with a mobile phone.

The company plans to develop an integrated payment and accounting network called ThinkLink, with FaceCash as the first component of that system to launch. FaceCash operates as a simple debit from a consumer’s pre-funded account.

Because many merchants may already have the existing barcode hardware, along with a low transaction fee of 1.5%, the system is likely to be a low-cost implementation, though they may have some tough competition from the big existing player’s like Visa or MasterCard. The company’s success in this area hinges on merchant adoption.

However, many small merchants are likely to be tempted by the use of existing barcode hardware and lower rates, as well as a desire to move away from the established credit card companies and their big corporate prices and reputations. In concept, it’s a lot of things that your larger and financial companies don’t offer, and FaceCash may leapfrog those industries, if done right.

FaceCash uses simple barcode technology to facilitate quick  payment transactions in restaurants, clothing stores, and other retail shops. The system offers  the ability to record multiple account numbers directly within the FaceCash application. Buyers also have access to a good amount of  detail about their purchases because an  electronic receipt is automatically generated each time a FaceCash transaction takes place.

A particularly nice feature that is not available in most other mobile transaction system is that FaceCash records line item transaction data–so buyers get item details about their purchases–not just the total amount spent.

The application can be used with any participating merchant, so that it is no longer necessary to download a different mobile application for each vendor. Unlike other mobile payment systems, buyers do not need cases, stickers, dongles, attachments, or any other kind of extra hardware.

On the merchant side, there  is one flat rate for processing a FaceCash transaction: 1.5%. This rate represents a savings for most sellers of over 50% compared to existing electronic payment solutions, as aggregate credit card processing fees tend to average 3.2% per transaction (or higher) for most small merchants, with some card processors charging as much as 5% per transaction. Set up costs are also relatively low since FaceCash just requires a computer with internet access and an inexpensive barcode scanner at the point of sale, which many sellers already own. For those that need hardware, all of the necessary equipment is available for purchase.

FaceCash works on debit basis. Consumers pre-fund their FaceCash accounts by transferring money from a checking or savings account, and can then debit their available balance by making purchases. FaceCash gets its name from the patent-pending security technology built into the system, which relies on an image of the buyer’s face to positively verify identity. Whenever a FaceCash purchase is made, the buyer’s face appears on the seller’s web-based point of sale system. The first time a buyer makes a purchase, the seller confirms that the photograph is accurate using the buyer’s driver’s license. A number of other security measures are built into the system.

Free FaceCash native applications are available for iPhone, Android and BlackBerry phones. Those with other types of phones can still use FaceCash through the mobile web client, and those with no phones at all can even use FaceCash via a paper wallet card generated during the sign up process, much like a printable boarding pass.

More info: FaceCash

Mobile Payment Players to Watch in 2011

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As consumers increasingly adopt smartphone technology and all the new app’s that go with it, mobile payment is becoming much more used and accepted, and companies including Google, Apple, and other smartphone players are providing mobile-payment enabling technologies such as near-field communications (NFC) into their devices, while other service like Foursquare and ShopKick are engaging consumers at the point-of-purchase locations like never before.

Editors at Advertising Age have done a round-up of some potentially hot product and services offerings for 2011, covering PayPal, Rightcliq, Square, iConcessionStand,  and Zong.

“The rewards for savvy brands that build relationships with consumers on these new payment platforms go beyond just publicity and profit – it may just be a way to create meaningful relationships with consumers at the point of purchase and far beyond.”

More: Meet the Next-Generation Payments Systems Set to Drive Future Commerce.

Two Way Communications Payment Sticker Introduced by Blaze Mobile

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Blaze Mobile has announced its a new “smart” sticker, which allows real-time transfer of information between the sticker and a mobile device, without the use of a carrier network. With Blaze’s new sticker, when consumers make contactless purchases, the data is sent directly from the sticker to the mobile device, eliminating the need for a carrier network or WIFI.

The sticker can be used on any mobile device, and offers Blaze’s users real-time account information whether in a store, subway, transit station, airplane, or anyplace without cell phone reception. The data transfer is a two-way transfer, so the mobile device can also transmit information to the smart sticker without using a carrier network or WIFI. This technology offers many new possibilities for consumers — for example, a customer can easily store and select from multiple payment options, like credit, gift and debit cards. In addition, Blaze’s sticker allows for a host of business options beyond mobile payments, such as remote access to buildings, cars or health care data, and increased data security because of the ability to remotely deactivate lost or stolen stickers.

This new sticker improves upon the original patent-pending sticker concept that Blaze Mobile pioneered in 2006. Blaze’s first mobile payment sticker was introduced as a solution to the lack of near field communication (NFC) cell phones in the marketplace. The payment sticker has proven popular, and other companies have embraced Blaze’s idea and created their own versions. Blaze’s original sticker sends transaction data in one direction from the sticker to the Point-Of-Sale (POS) terminal, and then traverses the payment network to the Blaze servers. Blaze servers then deliver this digital receipt to the mobile device Over-The-Air (OTA) using the carrier network. This entire process takes only a few seconds, and is acceptable to most customers in terms of performance. A potential problem arises in situations where the wireless network is not available to immediately transfer the data, and the new Blaze sticker eliminates that limitation.

“We are excited about the potential of this new smart sticker since it closely mimics the behavior of NFC embedded inside a cell phone. More importantly, it dramatically increases the number of potential NFC devices, and encourages consumer adoption of contactless payments. Manufactures of mobile hardware and software have announced plans to introduce more NFC devices in to the market, which we are excited about. Until NFC handsets become commonplace, our payment stickers are a free and easy solution for consumers and industry,” explains Michelle Fisher, CEO, Blaze Mobile.

The new Blaze Mobile smart stickers will be available during the first quarter of 2011.

Source: Business Wire

Visa Mobile App for Mobile Shopping Offers Now Available

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Visa has announced its Visa Mobile application for the iPhone. Through a tap of the finger, Visa account holders can access more than 50 unique merchant offers ranging from clothing and dining to entertainment.

Visa is working with a select list of popular merchants to deliver exclusive offers to Visa account holders, helping them save money on every-day purchases. More than 50 merchants including some of the most popular retailers in the U.S. such as 24 Hour Fitness, Jos. A. Bank, Meineke, New York & Company, and Zales are providing discounts through the Visa Mobile application, helping them reach more consumers with targeted offers. Offers are automatically delivered and stored in the application, can be tailored to consumers’ life styles and preferences, and can be redeemed either online or at physical retail locations. The application uses location-based technology to provide consumers with a map and directions to a nearby retailer where they can redeem merchant offers.

“Merchants are looking for new and more efficient ways to reach customers, while budget-conscious consumers expect a more rewarding and convenient shopping experience,” said Bill Gajda, Head of Mobile at Visa Inc. “The Visa Mobile application meets the needs of both merchants and consumer and brings one of the most trusted brands in payments to the iPhone.”

Visa is working closely with handset manufacturers, mobile network operators and technology providers around the globe to bring the reliability, scalability and trust of Visa payments to the mobile channel. The Visa Mobile application for the iPhone was developed in partnership with Monitise plc, a UK business which is a global-leading mobile banking and payments platform. Visa signed a global alliance with Monitise in June 2009 to custom-develop mobile services for Visa across a spectrum of handsets to ensure Visa account holders have a consistent, user-friendly, and secure mobile payment experience.

Visa Mobile Application Features

Visa account holders simply download the Visa Mobile application from the iTunes app store and immediately have access to more than 50 unique merchant offers. Key application features include:

Offers:

  • Visa Offers can be tailored to match consumer lifestyle and interest. Visa Account holders can select from several merchant categories such as clothing, dining, jewelry, travel, entertainment, or retail goods. This ensures consumers only get offers they want, and can help increase merchant traffic, loyalty and customer satisfaction.
  • Participating merchants include Planet Hollywood, Papa John’s Pizza, 24-Hour Fitness, Jos A Banks, Tourneau, New York & Company, Holiday Inn, Ramada, Crowne Plaza, Pearle Vision, Meineke, Buca di Beppo, Cold Water Creek, and Hard Rock Café.
  • Account holders with Visa Signature cards will receive special Visa Signature offers in addition to the standard offers.
  • Visa is continuously adding and enhancing merchant offers available through the Visa Mobile application.

Location-Based Services:

  • Using location-based technology, the Visa Mobile application will show consumers nearby merchant locations and provide directions to locations where they can redeem offers and allows them to find the nearest ATM.

The Visa Mobile application is now available as a free download from the iTunes app store.

Source: Business Wire

INSIDE Contactless Launches SecuRead System Solution for NFC Device Manufacturers

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INSIDE Contactless, a provider of semiconductor solutions for secure transactions and digital identity, has announced SecuRead, a complete system-in-package (SIP) NFC solution that allows manufacturers of NFC mobile and other devices to integrate all of the contactless, security and application functions required for a broad range of NFC payment, retail, transit, ID and access control applications.

SecuRead integrates INSIDE’s MicroRead NFC controller with a high-performance security controller from Infineon Technologies and a GlobalPlatform-compliant Java Card operating system from Giesecke & Devrient. SecuRead also integrates INSIDE’s Open NFC protocol stack to provide a best-of-breed solution that helps mobile device manufacturers bring rich NFC capabilities to market more quickly.

“Trusted applications like banking and payment demand the highest level of proven security in their hardware and their operating systems, and this is what our secure element brings to the SecuRead SIP solution”

“Unlike other NFC solutions, which must be integrated from multiple hardware and software providers and are less technically robust, SecuRead truly breaks new ground in the NFC market, providing a one-stop-shop, turn-key solution that mobile device makers can use to enable a broad range of NFC applications in their products,” said Loic Hamon, vice president of products and marketing for NFC at INSIDE Contactless.

“SecuRead offers a superior NFC controller, one of the largest capacity and most flexible secure elements on the market and the leading Java Card OS in a single package, with superior software and technical support from a single, global supplier.”

According to Hamon, INSIDE’s SecuRead already has been selected by a leading mobile device manufacturer for use in NFC mobile device products due out in 2011.

“Trusted applications like banking and payment demand the highest level of proven security in their hardware and their operating systems, and this is what our secure element brings to the SecuRead SIP solution,” said Juergen Spaenkuch, director, platform security at Infineon Technologies. “Infineon’s secure element chip dedicated to NFC applications has been certified to the highest proven security certifications and type approvals such as Common Criteria EAL5+ (high) and EMVCo. The chip also offers an optimized interface to the MicroRead NFC controller, thereby enabling INSIDE to create a superior product to meet current and future requirements of the mobile industry.”

SecuRead offers all the functionality of INSIDE’s third-generation MicroRead v3 silicon—plus the secure element and Java Card OS—in a VQFN-32 package, and is pin-for-pin compatible with the standalone MicroRead product. The on-chip Java Card operating system, based on G&D’s Convego® Join 4, includes the implementation of the GlobalPlatform 2.1.1 specifications, supports the full Java Card 3.0.1 API and is compliant with relevant ISO standards as well as EMV for domestic and international mobile payment. The Java Card Operating system supports core AES cryptography for OSPT standards in the transit fare collection market, and a MIFARE-compliant emulation is provided for compatibility for some transit applications.

SecuRead also supports HID iCLASS virtual credentials and is HID Trusted Identity Platform (TIP)-enabled for access control and emerging mobile applications. The secure element features a powerful secure microcontroller with multitasking capability that stores both code and data in a 144KB non-volatile memory, and is Common Criteria EAL5+ (high) certified and EMVCo approved.

“SecuRead represents another productive partnership with INSIDE Contactless to create an innovative solution for the mobile industry,” said Axel Deininger, head of the payments division at G&D. “Our high-performance Java Card solutions, such as the one employed by SecuRead, are tailored to the specific needs of markets with the highest security requirements such as payment, transit, access control and other mobile applications.”

INSIDE’s SecuRead solution is pre-integrated with INSIDE’s Open NFC, a commercial-grade NFC protocol stack that runs on the application or baseband processor to control SecuRead operation. Open NFC version 3.5 software and source code is available at no cost in Android, Windows Mobile, Linux and Java (JSR-257) editions with API documentation on SourceForge.net. INSIDE also offers a comprehensive suite of NFC payment, transit, loyalty, and access control and identity applets to run on SecuRead, including support for HID iCLASS virtual credentials.

“The new SecuRead best-of-breed solution is the fastest path to implementing iCLASS virtual credentials in NFC mobile phones,” said Dr. Tam Hulusi, senior vice president at HID Global. “Through our longstanding partnership with INSIDE, iCLASS support is now a standard feature of SecuRead. For users looking to put iCLASS virtual credentials on mobile phones, this is great news.”

Source: Business Wire