With a slowdown in consumer spending rocking the economy, retailers and card companies have been eagerly awaiting user-friendly technology that would enable wireless phones to handle contactless transactions, in hopes of spurring sales. That time may be now.

At the National Retail Federation conference in New York this week, Mocapay Inc. of Boulder, Colo., introduced a working mobile payment system that allows consumers to use their phones to manage the balances on closed-loop prepaid cards and to make payments at the point of sale.

The company said its technology is already in use at a Colorado convenience store chain.

The technology, if widely adopted, could be a boon all along the retail sales chain, which generated $3.7 trillion in sales through November, according to the Commerce Department.

Industry studies show that consumers typically spend more with contactless cards than when they use cash. Merchants, card companies, and issuers would benefit from a system that encourages people to increase their spending.

Mocapay's goal is not new, but its approach is different from that of other payment companies. Most of the efforts in the mobile payments industry to date have centered on adding near-field communication technology to phones. NFC is similar to the technology in contactless payment cards, and can be used with the same payment terminals. Backers say that adding NFC chips to phones is a concept consumers will find easy to grasp. However, despite numerous field trials of NFC-capable phones, few models available now have the chips.

Mocapay's system, however, lets users make payments through text messaging, a feature available in almost every mobile phone. It also supports a bar code payment system that can work with some point of sale terminals, and will eventually support NFC, the company said.

"We just want to be ready. Our whole strategy as a company is an 'any' strategy — any point of sale [terminal], any handset, any carrier, any payment account," Kevin Grieve, Mocapay's chief executive, said in an interview.

The system is designed to work with existing payment accounts, so merchants do need not to deploy new gift or loyalty cards to begin using Mocapay. Nor do they have to stop selling plastic cards if consumers want to use both the phone and the card to access the same account.

The Mocapay system makes it possible for users to register a prepaid card account through their mobile phones, and then access the account with their phones to check their balances. Any mobile phone with a browser can produce a bar code image that can be read by some terminals; people can also use text messaging to request a one-time-use text code that can be punched into a keypad or read aloud to a cashier to authorize a debit to the prepaid account.

Mr. Grieve said some terminals already include the readers needed to scan the bar code images on a phone for payment, and others can offer the capability through add-on hardware.

He said he expects the bar code system to eventually become more popular than either of the two text message systems, but he does not expect that change to occur overnight. "You have a very long time before that base gets changed, and so that's why we offer the four different methods," he said.

The text message codes expire in 30 minutes or when they are used. Mr. Grieve said the code could even be shouted across a store without compromising the card account's security, since it can only be used to initiate a single transaction.

Mocapay's system was tested in 2007 with about 200 Boulder merchants. When that test was completed, the company focused on integrating the payment system with merchants' gift card programs.

Its first customer, J.A.D. Inc.'s ShortStop Stop convenience store chain, began offering Mocapay's payment technology to customers in November.

Jeff Dageenakis, a co-owner of ShortStop Stop, said his company's prepaid card sales have already increased since it introduced Mocapay.

Before offering Mocapay, ShortStop Stop's cards had very little adoption — most were purchased by the owner of a nearby business who bought them as employee gifts a few times a year, he said. "We've definitely had a lot more people signing up for it, and using it, and refilling" since adding Mocapay, he said.

Customers say it is convenient to be able to use their cell phones when they are short on payment options, Mr. Dageenakis said. "A lot of people forget wallets, forget cards … you never forget your cell phone."

A key benefit for ShortStop Stop is the ability to send messages to customers, Mr. Dageenakis said. Customers have expressed interest in opting in to such messages, particularly to be warned of changing gas prices.

"One of the things they brought up is, if we know gas prices are going up tomorrow morning, we can send a text out and say, 'Hey, you know what? Gas prices are going up, why don't you come in today and top off your tank?' " he said.

ShortStop Stop currently accepts Mocapay payments only through text messages, but Mr. Dageenakis said he is considering updating his terminals to accept the bar code as well.

"We have some upgrading that we need to do to our systems anyway," he said. "If that's a possibility, that would definitely make things easier if the system's capable of doing it."

Nick Holland, a senior analyst at Aite Group LLC of Boston, said Mocapay's system will have the best chance of taking off if it can win the support of a major merchant — "either a big card network or a very big retail chain. We're talking Starbucks or McDonald's, really, for it to get the attention of the masses."

It might garner widespread attention in Boulder by working with merchants that do business within local ski resorts. "A ski resort is pretty much a closed-loop system," and thus a natural test bed for a new payment system, he said.

Mocapay's ideas and technology are sound, Mr. Holland said. "The whole mobile wallet concept is something I embrace; it's just difficult to get traction when you've got to convince so many stakeholders."

He also praised Mocapay for developing a roadmap that goes beyond text messages. Text messages make sense for less time-sensitive financial activities such as mobile banking, but "at the point of sale, where it's still about speed and convenience, texting is not fast or convenient," Mr. Holland said.

The bar code idea has "some mileage," particularly because, unlike contactless technology, it should work with some of the mobile phones consumers use today, Mr. Holland said.

However, Mocapay may have to take a page from the card networks' playbook for contactless adoption to convince merchants to install the necessary readers, he said.

"The card networks pretty much paid for the deployments with" some of their major merchant users. "They gave them a very preferential rate on a lot of the terminals," Mr. Holland said. "Like, free."

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