Phones with a special microSD memory card and Visa’s PayWave mobile app can be used to make transactions by holding the device near a reader.

(Credit: Elinor Mills/CNET)

BARCELONA, Spain-Later this year you’ll be able to pay for clothes, taxi fare, and dinner with your mobile phone and leave your credit cards and cash at home.

Visa is planning a commercial rollout in the U.S. in the second half of this year of a service for allowing allow people to turn their existing smartphones into electronic wallets. It uses Near Field Communication (NFC) short-range wireless technology and includes real-time anti-fraud alerts and other features designed to protect consumers from fraud, Bill Gajda, global head of Visa Mobile, told CNET in an interview at Mobile World Congress 2011 here this week. Visa was demonstrating its PayWave mobile payment system at the show.

Despite the promise of convenience and ease of use, the e-wallet industry has gotten off to a sluggish start as mobile handset makers have dragged their feet on adopting NFC technology and retailers saw no need to install mobile payment readers if the phones weren’t yet equipped. In 2008, the GSMA, a trade association representing the Global System for Mobile Communications industry, called on manufacturers to embed NFC chips in phones by late 2009 and three years later they are trickling out.