Bank of America launching mobile payment trial
Bank of America will roll out a mobile payment trial enabling customers to use their smartphones to fund retail purchases. The program, slated to launch in September and continuing for the remainder of the year, will enable selected employees and consumers in the New York area to install NFC chips in their mobile devices--to pay for purchases at participating retailers, users will "bump" their phones against point-of-sale devices that collect the relevant bank account data. "We see this as a critical capability given the increasing acceptance and adoption of bank services on the phone," Bank of America's head of electronic commerce Laurie Readhead told Reuters. The company declined to name its technology partners and did not indicate how many consumers and retailers would participate in the program.
The Bank of America trial will roll out months in advance of a reported contactless payment pilot spearheaded by AT&T (NYSE:T) and Verizon Wireless (NYSE:VZ). Codenamed Mercury, the m-payment trial is slated to launch in mid-2011 in markets including Austin, Texas, Minneapolis and Salt Lake City; according to Bloomberg, AT&T and Verizon Wireless are equal partners in the venture, with T-Mobile USA controlling a smaller stake. Discover Financial Services' payment network will process all in-store transactions, and global financial firm Barclays will help manage users' credit accounts. Representatives from all three carriers, Discover and Barclays have declined to comment.
The worldwide mobile payments market--including purchases of digital and physical goods, money transfers and NFC transactions--will grow from $170 billion in 2010 to almost $630 billion in 2014 according to a recent forecast issued by Juniper Research. Citing growing smartphone adoption and increased app store traffic as catalysts behind the increase, Juniper also expects SMS-based ticketing schemes and mobile shopping efforts to boost the m-payments market in developed nations, while in developing regions, SMS-driven money transfers will increase at a rate of 30 percent year-over-year. Juniper adds that the top three regions for mobile payments--the Far East & China, Western Europe and North America--will represent nearly 70 percent of the global mobile payment gross transaction value by 2014.
For more on the Bank of America trial:
- read this Reuters article