Bank of America Corp. is collaborating with Visa Inc. and DeviceFidelity Inc. on a program to begin in September in New York that will enable consumers' smartphones to operate as contactless payment devices, Visa confirmed.

The test, using microSD chip technology integrated with a mobile payment application, is B of A's first foray into mobile contactless payments, a bank spokeswoman said. The test will run through the end of the year.

Bank of America said it will issue microSD memory cards to consumers selected to participate in the test, providing them with an application that will act as an electronic wallet within their mobile phone, the spokeswoman said. Once the phone is set up, consumers may use their phone as a payment device at merchants who accept contactless payments.

Consumers tap their phone in front of the contactless terminal, which can read the phone from up to four inches away, and the microSD card, which consumers can put into many phones themselves, provides their secure payment information to the merchant, the spokeswoman said.

Visa said its microSD technology enables immediate point of sale authorization of credit and debit payments, and consumers receive confirmation on their phones a few seconds after the transaction is completed.

Bank of America declined to comment on the scope of the test or any fees for participants.

Visa is working with U.S. Bancorp on a similar pilot program, which will begin in October.

Industry observers say that microSD technology, while falling short of the potential for phones equipped with near-field communication chips, is a logical next step for the payments industry. NFC chips enable two-way communication with other NFC chips for payments and to support the downloading of information such as coupons and rewards.

While the payments industry waits for widespread availability of NFC phones, "there needs to be a bridge technology," said Todd Ablowitz, the president of Double Diamond Group, a consulting firm in Centennial, Colo.

Industry experts said about 57% of mobile phones on the market are equipped with a slot for a microSD memory card.

Once its mobile-payments pilot is complete this year, B of A may expand the program to other cities, its spokeswoman said.