The iCarte plugs into the bottom of an iPhone 4, iPhone 3GS or iPhone3G. It contains an NFC/RFID antenna and an embedded Secure Element where the Visa card details are stored. Payments are made via a dedicated app.
“Contactless,” in this context, refers to the use of a wireless device. A payment is contactless when, instead of inserting your credit or debit card, you hold your card or keychain device within a few inches of the terminal, and your payment information is sent and processed wirelessly.
RFID (Radio Frequency IDentification) tags and labels are used mostly in manufacturing, shipping and object-related tracking. They have minimal built-in support for security and privacy. RFID tags are used to track pallets and packages in manufacturing and shipping, and for highway toll payment. They are used to keep track of people's pets and animals in agriculture, and to monitor start and finish times for runners in large races. Merchants are working to use RFID tags to replace bar codes on store-bought items to scan purchases and track inventory.
The white paper focuses on a "collaboration model," where financial institutions, network operators, trusted third parties and other stakeholders in the mobile payments ecosystem cooperate in the management and deployment of mobile applications.