The largest U.S. consumer bank, Bank of America Corp and Visa Inc, the world's largest payment processor, are planning to begin a test program 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. 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.
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.
Visa said in February that it planned to start testing technology that would allow customers to make in-store payments using smartphones.
Latest developments on the matter suggest that Verizon Wireless, AT&T, T-Mobile USA and Discover Financial Services are working on forming a joint venture aimed at offering mobile payments services, people familiar with the matter told Reuters.
Bank of America, which introduced mobile banking in 2007, has more than 5 million customers conducting $15 billion in transactions via their phones - primarily bill payments and account transfers.
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