Bank of America and Visa to test new smartphone payment plan

Many consumers have expressed a desire to use their smartphone to make credit card payments instead of traditional card swiping, and now two financial giants are going to offer them that service.

Bank of America and Visa are going to begin trying out a new system that will allow users to simply tap their phones against a sensor to make a credit card payment. According to a Reuters report, this program will commence testing in the New York City area at the start of September and will run through the end of the year. Visa will also begin a similar trial with US Bancorp in October.

"We see this as a critical capability given the increasing acceptance and adoption of bank services on the phone," Laurie Readhead, Bank of America’s head of electronic commerce, told Reuters.

The Visa program will work by implanting a small computer chip into the smartphones of select employees and customers, who will be able to make purchases by tapping their phones on a sensor at checkout.

It was recently rumored that AT&T and Verizon would team up to offer a similar program, but theirs will not be tested before either of Visa’s.