Payment News

Bank of America, the largest financial institution in the United States, and Visa, the largest payment processor in the world, has plans to start test pilot program next month in New York for Near Field Communication (NFC) mobile contactless payments that will allow consumers to utilize their mobile phone to purchase goods and services at the retail point of sales.

It is reported by Reuters that the program will start early September and end towards the end of the year in the New York Metro area. With smatphones getting smarter by the day, mobile phone offers enough flexibility for companies such as Bank of American and Visa to fit it with applications or device to turn the phone into a digital wallet for contactless payments.

Lately, the biggest telecommunication companies and banks in the U.S. have been investing in the contactless mobile payment space for the point-of-sale. Last month, Verizon, AT&T, and T-Mobile formed a joint venture in mobile payments code-named project Mercury. Additionally, Visa is going to start test pilot program with US Bancorp sometime this year, most likely in September or October, for mobile payments.

How the test pilot program is going to be carried out in the New York area with customers is that they will be given a small chip to install on their phone that will use the phone’s radio waves to send off short rage signals to a contactless reader to process payments by waving the phone over the reader. The chip will be directly supplied by Visa or one of Visa’s authorized vendors/distributors. After the customers waves the mobile phone in front of the point-of-sales contactless reader, the customer’s checking or savings account information will be used to complete the purchase in much the same way a debit card swipe works.

Back in 2007, Bank of America was one of the first companies to offer online mobile banking services for its customers to use to keep track of their account activities, initiate money transfers to another account, and to pay bills. An estimate 5 million BofA consumers used mobile phones to conduct more than $15 billion in transaction over mobile device. There is certainly increasing competition to see who is going to get ahead when it comes to mobile payments and Bank of America is certainly going to take the lead to retain their own customers by offering alternative payment solutions.

Source: Reuters Online