Silicon Valley-based Cimbal has announced the public launch of its software-based NFC payment network. The network, which the company claims is the first of its kind in the world, enables secure payment and peer-to-peer transactions using a smart phone instead of a plastic card.
For transactions, a Cimbal user creates a payment request on his phone or the Web. Cimbal’s system then produces a single use 2-D barcode token. The payer launches Cimbal on his mobile phone, enters a PIN, and scans the 2-D barcode.
Cimbal then authenticates both parties and prompts them to confirm each other’s identity. The system authorizes available funds and clears the transaction in seconds. Both parties receive confirmation receipts on their device and in their Cimbal account history.
According to Cimbal, no confidential information is ever sent over the unencrypted channels or stored on a user’s mobile device. Additionally, the system does not require NFC readers and extra hardware embedded in mobile phones.
According to Cimbal, person-to-person and person-to-merchant transactions are free for consumers. Merchants pay a small transaction fee, but it is lower than credit or debit card interchange rates, says the company.