The trend toward using your mobile phone in place of a credit card continues to accelerate. Next month, Bank of America, the nation’s largest consumer bank, will begin a test program that lets customers use smartphones to pay for store purchases.
The program, which will run in the New York region through December, is the latest step in giving consumers a “digital wallet” smartphone option. Here’s how it works: A small radio chip is installed in your phone and coded with your bank account and password. You then “bump” the phone with a scanner at checkout and the sale amount is transferred from your account.
BoA’s move is the latest in the race to develop smartphone payment systems. The banks are moving quickly in this area, but so are companies outside the banking industry. As Reuters notes, “Competition is increasing from outside the banking world.”
Mobile phones have already replaced the wristwatch for many college students and it seems only a matter of time – and not much at that – before it replaces the wallet too.