Vodafone is working with Visa to offer new SIM cards with virtual credit cards encoded onto them.
Using the NFC built into the smartphone and a new Vodafone SmartPass app that allows you to create a virtual wallet for making payments, you pre-load funds into SmartPass rather than letting it directly access your bank accounts.
You've probably seen the new payWave symbol that Visa has on its new credit cards and EFTPOS systems.
This allows you to pay, with your credit card, simply by waving your card near the terminal. There's no swiping, inserting or even touching.
With NFC equipped smartphones, a special radio built into them that uses a technology called Near Field Communications. It allows NFC-enabled devices to exchange data.
For example, it’s possible using NFC to exchange photos between two smartphones or a phone and NFC-enabled computer.
In theory, it's possible to use NFC on a smartphone to make payWave payments as both use the communications protocols.
However, the number of NFC-enabled phones on the market has limited the opportunity to use this technology with Point-of-Sale terminals.
As more people have NFC-enabled phones, it probably makes sense for your point-of-sale systems to be ready to take payments however customers want to make them.
Interestingly, despite Australia's track record of being early adopters of technology, it's South Korea that leads the way with hundreds of thousands of NFC phones and terminals being deployed across the country.