Citigroup Inc. will be making contactless payment stickers available to customers in select cities this summer, PaymentsSource has learned.

Customers will receive the stickers to replace contactless “toggles” they received last year as part of a pilot in those select markets, a person familiar with Citi’s plan tells PaymentsSource, unable to identify those cities. The toggle is a contactless tag users may place on a keychain ring.

Citi already has begun offering the MasterCard-branded PayPass stickers to a limited number of customers through its online-banking website. The New York-based bank is using the tagline “The back of your phone just became its coolest feature.”

An official announcement of the sticker rollout will come soon, the source says.

The stickers, which use chips from France-based Oberthur Technologies, enable consumers to make payments of up to $50 at the point of sale. The stickers link to customers’ credit card accounts.

Some industry insiders view contactless stickers as a bridge to Near Field Communication-enabled mobile payments. Unlike contactless stickers, NFC chips support two-way communication with other NFC chips, enabling merchants, for example, to provide immediate loyalty rewards to customers through their NFC phones when tapped on a terminal also containing an NFC chip.

Citi last year in India tested NFC mobile payments. The test involved some 5,000 consumers with Nokia 6212 phones who could make contactless purchases at approximately 400 merchants (see story). 

Two months into the trial, some 800 participants made six or more purchases using their phones, according to Citi. Nearly all consumers made at least one purchase. The trial ended in December.

Contactless payment-sticker schemes are beginning to gain momentum in the U.S. Bling Nation Ltd., for example, has experienced some success with its mobile-payments system that 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 moderate success with several community banks nationwide, 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 CEO, said at a payments conference last month (see story). 

What do you think about this? Send us your feedback. Click Here.