Card companies are betting that if they stimulate consumer demand for mobile payments, it will spur the phone networks and manufacturers to move faster on improving the technology.

First Data Corp. plans to begin selling its mobile payments "Go-Tags" on racks at a handful of retail chains around the country this summer to drum up consumer interest.

The company also has struck a deal with Visa Inc. to expand merchant acceptance of these contactless stickers, which can be attached to mobile handsets or other devices for use at the point of sale. MasterCard Inc. announced last month that it had a similar alliance with Blaze Mobile Inc. of Alameda, Calif., which also makes contactless stickers.

All these companies say they view the stickers as a stopgap technology until near-field communications chips are incorporated into the handset itself. But Barry McCarthy, the president of product innovation at First Data's commercial services unit, said that if payment companies encourage consumers to use their phones as payment devices, they in turn will demand that network operators and handset manufacturers integrate the feature into the phones.

"Until we have something inside the phone, the step in between is using something on the phone," he said. "We think we can kick-start this market."

In a pair of internal trials, First Data, a portfolio company of the investment firm Kohlberg Kravis Roberts & Co., found that consumers were quick to accept the stickers as a more convenient form of payment, McCarthy said.

A year ago the Denver company began offering the tags to its employees at its Denver corporate campus and its Hagerstown, Md., center in conjunction with the French facilities management company Sodexo, which runs the company cafeteria. The "SoGo" tags, set up as closed-loop reloadable prepaid accounts, could be placed on an employee badge, cell phone, or any other portable object and did not require employees to carry their purses or wallets.

Users of the tags visited the cafeteria 30% more often and spent 10% more money per visit, McCarthy said. What was most encouraging, he said, was that 96% of the workers preferred to use the tag exclusively, rather than a conventional card.

"We have a once-in-a-lifetime opportunity to truly re-architect how this works in the consumer's mind," McCarthy said.

Sodexo has begun offering the program at other facilities it manages around the world, he said.

Michael D. Capellas, First Data's chief executive officer, said in an earnings call last month that the agreement with Visa "greatly increases the reach of our Go-Tag product. As a result, we have signed a number of large nationwide merchants who will both distribute Go-Tags and accept them for payment. We will be announcing these shortly."

McCarthy said the tags will be linked to a reloadable prepaid account and sold at merchants in package along with a conventional card. The company also plans to seek banks to act as issuers.

MasterCard's Canada unit announced Thursday that it had completed a mobile payments trial with Citigroup Inc.'s Canadian cards unit and BCE Inc.'s Bell Mobility, the nation's largest telecom.

Scott Lapstra, the vice president of market development at MasterCard Canada, said the trial showed frequent usage by several hundred participants, with average transactions just under $20, indicating substitution for cash.

"We still need to see commercial availability of NFC-equipped mobile phones," Lapstra said. "That will be the real next step that leads to commercialization of mobile" payments. Such phones are not likely to be widely available before the end of 2010, he said.

Visa announced last week the first commercial launch of its NFC point of sale payment technology on mobile phones — in Malaysia. Pam Zuercher, the vice president of product innovation at the Visa U.S.A. unit, said other markets will come along, but only when they reach the "tipping point" where it becomes practical.

The Malaysian rollout illustrates the complexity of using the handsets for payments. Visa teamed up with Maybank, one of Malaysia's largest financial institutions; Maxis Communications, the largest wireless carrier in the country; and the Finnish phone maker Nokia Corp.

Zuercher said Visa expects the mobile payment feature to be used mostly in coffee shops, supermarkets, convenience stores and other merchants where transaction amounts are low and speed of service is a premium feature.

Because Malaysia uses the Europay, MasterCard, Visa security standard, which requires a chip and PIN for high-value purchases, the mobile transactions are limited to about $42, she said.

Visa chose Malaysia for the initial rollout because the country is an early adopter of new payment technologies and has a fairly dense population of contactless merchant acceptance locations.

Zuercher would not offer any forecasts about introducing mobile payments in the United States, or other markets. "The time lines around the world will vary, depending on when we reach these various tipping points," she said.

McCarthy predicted that mobile transactions will become relatively common within two years and will be bigger than Internet commerce in four years. "The future of commerce is in the handset," he said.

Fred Brothers, the managing partner of the technology consulting firm eCom Advisors in Dublin, Ohio, said the adoption by different demographic groups also could be broader than most bankers believe, not confined to younger consumers.

eCom Advisors' research has found that adoption of online banking correlates to the sophistication of the handset, whatever the age of the user, he said. "We think it's causal. It's an enabling technology."

With a new wave of high-tech handsets coming to market, mobile payments are likely to be a reality sooner than most people believe, Brothers said.

That will force merchants to install the terminals to accept those payments, he said. "Regardless of everybody's attempts to drive consumer preferences, merchants will accept the forms of payment that consumers choose to use."

The fledgling alternative payments network Bling Nation Ltd. announced success Wednesday in an initial test of its closed-loop payment sticker, a trial involving 32 residents of Palo Alto, Calif., and a handful of local merchants. Both groups found the technology convenient and easy to use, Bling Nation said.

It is now testing its system with a community bank, and expects to announce within 45 days that the local network is live, said Meyer Malka, a co-chief executive of the Palo Alto company.

The company has plans for the day when handsets are equipped with payment chips and downloaded applications, but for now is focused on the contactless stickers and text messaging, Malka said. "We want to go to market with the most simple solution possible."

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