Life Takes Cell Phones: Visa, Bank of America To Launch Mobile Payments

Life Takes Cell Phones: Visa, Bank of America To Launch Mobile PaymentsVisa Inc. and Bank of America Corp have announced a new mobile payment program that will test in New York City starting next month, potentially paving the way for smartphones to be as common a fixture in American shoppers’ hands as plastic cards.

What the credit card brand and the U.S. banking chain propose is more like a debit card than a charge card. Select participants will have┬ásmall chips supplied by Visa installed in their smartphones, which will emit radio signals. As Reuters describes it, “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.” Reuters also reports that US Bankcorp also plans a similar test program with Visa, starting in October; the Bank of America pilot will continue through the end of the year.

The news sounds exciting in the United States, but similar payment systems utilizing consumers’ cell phones are old hat in other countries. For example, in Japan mobile users can purchase drinks from vending machines simply by waving their handsets at them. “It’s kind of dangerous,” laughed a former roommate from Japan, “because it’s easy to think, ‘wow, this was free’ when actually it’s not free at all”–but it is certainly a boon for the marketers and sellers of canned beverages.

It’s not like this so-called “digital wallet” program is unique. Earlier this summer, we wrote about the mobile-ization of MasterCard’s PayPass system. It works in similar fashion to the Visa/Bank of America venture, only with stickers plastered onto phones to turn them into NFC credit cards. But as more of these disparate mobile purchasing programs get off the ground, it will get consumers accustomed to the idea. A smartphone: $200. The ability to buy anything you want with it? Priceless.