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CHARLOTTE, N.C. — Bank of America, the largest U.S. consumer bank, and Visa, the worlds largest payment processor, plan to begin a test program that lets customers use smart phones 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.
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.
The program will allow select New York-area employees and customers to install small chips, supplied by Visa and its technology vendors, in their smart phones 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 spokeswoman Elvira Swanson said the Bank of America pilot was not larger than the companys other mobile trials, but she said it could have a more powerful impact on the market than some previous pilots.
"Its a way to accelerate mobile contactless payments in the U.S. market," she said.
Competition is increasing from outside the banking world. Verizon Wireless, AT&T, T-Mobile USA and Discover Financial Services are working on forming a joint venture aimed at offering mobile payments services, said people familiar with the matter.
Bank of America, which introduced mobile banking in 2007, has
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