Bank of America is planning to test a program in September that would let customers use their smartphones to pay for purchases in stores. Under the program, which will run through the end of the year in the New York area, participants will install small chips in their devices that emit radio signals over very short distances (via Reuters).
Customers would then "bump" or wave their phones with or at the point-of-sale devices in stores. Their bank account data is then collected and purchase is completed.
Who Else?
Increasingly, vendors are developing technologies and programs to morph the smartphone into a digital wallet. Earlier this month, news leaked that AT&T, Verizon and T-Mobile are working on a project in which smartphones could be used as payment devices. The service is still in the beginnings of the pilot stage, with the project set to roll out in Atlanta and a few other US cities. Discover Financial Services and Barclays are working on the trial project, which uses contactless technology to convey the payments through Discover's payment network.
Consumer Concerns
Consumers, for their part, are looking forward to the convenience these applications would provide. A new survey by Sterling Commerce, an AT&T company, and Demandware found that 15% of consumers have used their mobile devices to make purchases and that two thirds are interested in the possibility of using their mobile phone to scan and purchase items, thus enabling them to bypass checkout lines.
However to truly drive adoption, vendors such as Bank of America and retailers that will use these offerings should take into account consumers' concerns about smartphone payment processes. They are:
- Internet non-connectivity (40%),
- Difficulty with the small screen size (34%) and therefore difficulty in visualizing the products (31%),
- Slow interaction with the retailer website (22%), and
- Difficulties in entering information due to a small keypad (21%).
- Also, nearly half of consumers would like the option of using PayPal and nearly 40% would feel secure knowing that the mobile phone app would not store their credit card number.
