Bank of America Corp, the largest U.S. consumer bank, and Visa Inc, the world's largest payment processor, plan to begin a test program next month that lets customers use smartphones to pay for purchases in stores. The program, to run from September through the end of the year in the New York area, is the biggest step yet by the two companies toward creating a "digital wallet" with a host of financial capabilities built into the latest, most sophisticated mobile phones.
Major U.S. banks, technology companies and cellphone providers are jockeying for the lead in the technology, which some say could become a primary means of everyday purchases. Visa also plans to conduct a similar test program with US Bancorp this year, a company spokeswoman said. A US Bancorp spokeswoman confirmed that it would begin its pilot in October. While mobile payments have been used for years in countries such as Japan, the United States has been much slower to adopt the technology. "We see this as a critical capability given the increasing acceptance and adoption of bank services on the phone," Laurie Readhead, Bank of America's head of electronic commerce, told Reuters.
The program will allow select New York-area employees and customers to install small chips, supplied by Visa and its technology vendors, in their smartphones that emit radio signals over very short distances. Customers would then "bump" their phones with point-of-sale devices in stores -- actually they need only wave the phones near the devices -- and their bank account data would be collected and their purchases completed. Bank of America declined to say how many people would be involved in the pilot, and a company spokeswoman declined to comment on Visa's involvement. Visa spokeswoman Elvira Swanson said the Bank of America pilot was not larger than the company's other mobile trials, but she said it could have a more powerful impact on the market than some previous pilots. "It's a way to accelerate mobile contactless payments in the U.S. market," she said. Visa said in February that it planned to start testing technology that would allow customers to make in-store payments using smartphones. At the time, Visa did not say which banks would conduct the tests.
Published Date: Aug 20, 2010 11:49 am | Updated Date: Aug 20, 2010 11:49 am