As payments executives debate which approach to mobile payments will win out, Bank of America Corp. is showing greater commitment to a system based on Visa Inc.’s specifications.
The Charlotte, N.C.-based bank plans to expand a mobile-payments trial it is conducting in New York to San Francisco and Atlanta this quarter, according to Michael Upton, BofA emerging channels capabilities executive.
“We have liked what we learned,” Upton said of the trial in Jan. 10 interview. “It does … give us some of the market differentiation in terms of consumer adoption, behavior, preferences [and] perceptions by moving to some of the other markets.”
BofA also plans to make the system commercially available to customers by the end of the year, Upton said.
The bank began a trial of the system with an unspecified number of employees in New York in September. The expanded pilot will include employees and consumer customers, Upton says.
BofA is testing the system using a mobile-wallet application that can store up to one of the bank’s credit cards and one debit card.
Visa last month made available its specifications to offer mobile-payments services to bank customers on a commercial basis after 18 months of testing, with certain iPhone, BlackBerry and Android handset models certified for use.
“The technology is no longer under pilot restrictions,” Dave Wentker, Visa head of mobile products, said in a Jan. 11 interview. “A bank may choose to run a limited test of it, but that’s their own decision.”
“They don’t have to ask us for permission any longer, which is a great place to be for the market to be able to move forward,” Wentker said.
That BofA plans to offer a commercial application this year is a good signal for mobile-payments development, says Beth Robertson, the director of payments research at Javelin Strategy and Research in Pleasanton, Calif.
However, the approach is likely not the end goal for the bank or others, she says, as developers expect smartphones to come pre-embedded with Near Field Communication technology.
Isis, a mobile-payments network being formed by a joint venture of telecommunication companies in conjunction with Discover Financial Services, is expected to use NFC phones (
Visa’s approach involves inserting a microSD card from DeviceFidelity Inc. into the smartphone’s memory slot (
BofA is one of four banks that Visa last year announced plans to include in pilots. JPMorgan Chase & Co., Wells Fargo & Co. and U.S. Bancorp also were working with Visa, though BofA is the first to say it plans to make the offering commercially available this year.
Chase and U.S. Bancorp on Jan. 11did not respond to calls or e-mails.
BofA may change the current iteration of its mobile-wallet app based on trial feedback, Upton said. For example, it may integrate the mobile-payments function into existing apps for commercial availability, he said, whereas during the test the payment function is accessed through a separate app.
That is the approach that Wells Fargo is taking in an employee trial it is planning for this year in San Francisco, says Peter Ho, the product manager for card services and consumer lending at the bank.
“We don’t want our customers to have … three or four different Wells Fargo boxes sitting on their screen,” Ho said in a Jan. 11 interview.
