Who needs plastic in the 21st century?
Two major U.S. banks have confirmed that they will later this year be launching joint test programs with Visa to let customers make in-store purchases with their smart phones. Reuters reported Thursday night that both Bank of America and U.S. Bancorp will be piloting programs this fall; Bank of America's program will begin next month in the New York area and U.S. Bancorp's will begin in October.
Visa had announced in February it planned to research mobile contact-less payment methods, but at the time, the company didn't reveal which banks it would be working with.
With the growing use of smart phones and banking services on the phones, it only seems logical that payment via smart phone should follow and Bank of America's head of electronic commerce told Reuters just that.
"We see this as a critical capability given the increasing acceptance and adoption of bank services on the phone," said Laurie Readhead.
So how does the program work? Small chips that emit radio signals are installed into the phone. Customers wave the phone near point-of-sale devices in store to complete a purchase.
The Bank of America pilot will be limited to a group of New York-area employees and customers and is set to expire at the end of the year.
Reuters also managed to confirm that major U.S. cell phone companies were working with at least one credit card company to achieve a similar goal. AT&T, T-mobile and Verizon, along with Discover Financial Services, are working on a mobile payment services joint venture, according to Reuters.
Photo by Tom Purves on Flickr. Used under Creative Commons license.