Bank of America to test cell phone credit cards

By Jeremy Simon

Bank of America employees will begin testing cell phones that can be used like credit cards the week of Nov. 5, 2006.  These credit card cell phones can be used to make payments by simply waving them in front of specially equipped readers.  

According to a Bank of America spokeswoman, the cell phone credit cards will be used within BofA's Delaware offices at vending machines and at an internal convenience store in the cafeteria.  Bank of America expects up to 500 of its Wilmington workers to participate in the six-to-eight-month credit card cell phone test.   

No credit card issuing bank plans a large-scale roll out of cell phone credit cards in the U.S., even though they are already used that way abroad.  Currently, Bank of America and its rivals, including Chase, are only testing the potential of cell phones as credit cards domestically.

Although a cell phone credit card here in the U.S. may not be forthcoming, customers can already make credit card transactions without swiping their plastic or providing a signature.  Bank of America and Chase offer no-swipe credit cards that rely on RFID technology so that customers can conduct transactions just by waving their credit card in front of a reader, with no signature required. 

Banks hope these no-swipe credit cards and similar devices will drive consumer spending on items under $15.  Visa has stated that U.S. consumer spending on items under $15 represents over $1 trillion in annual spending, although consumers use payment cards for less than 1 percent of that total.

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Published: March 30, 2007

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