Citigroup Inc. is planning to test contactless-payment stickers in select cities this summer.
The New York banking company will offer the stickers to customers to replace the contactless fobs they received last year as part of a pilot program in those markets, said a person familiar with Citi's plan, though the source did not know which cities.
Citi is already offering the MasterCard Inc.-branded stickers to some customers through its website, using the tag line "The back of your phone just became its coolest feature."
An official announcement of the sticker rollout will come soon, the person said.
The stickers, which use chips from Oberthur Technologies, enable consumers to make payments of up to $50 at the point of sale. They are linked to users' credit card accounts.
Some industry observers see contactless stickers as a bridge to near-field-communication-enabled mobile payments.
Unlike contactless stickers, NFC chips support two-way communication, enabling merchants, for example, to provide immediate loyalty rewards to customers through their NFC phones when tapped on contactless terminals.
Last year Citi tested mobile payments in India. The test involved about 5,000 consumers using Nokia 6212 phones that included NFC chips who could make contactless purchases at approximately 400 merchants.
Two months into the trial, 800 participants had made six or more purchases using their phones, according to Citi. Nearly all participants made at least one purchase. The trial ended in December.
Contactless-payment sticker programs are gaining momentum in the United States.
Bling Nation Ltd., for example, has had some success with its mobile payments system, which includes a contactless sticker.
Bling's partner banks issue the stickers, which initiate debit purchases drawn on their customers' accounts. Merchants must install contactless-payment readers to accept Bling payments.
Despite Bling's success with several community banks, company officials realize the advantage NFC chips bring to phones.
"Nothing increases the functionality of a phone like having a chip in the phone to pay," Wences Cesares, Bling's chief executive officer, said at a payments conference last month.
