Economy

Bank of America begins testing smartphone payments

Bank of America Corp. is testing a new generation of mobile technology that allows customers to make payments with their smartphones.

The pilot program starts next month in New York City with select employees and customers. The test follows a run-through in Charlotte that ran from late last year through this spring, bank spokeswoman Tara Burke said.

The so-called "bump technology" requires the bank to install a special chip in a user's phone as well as a software application. The chip emits a radio signal that is received by a device at the retailer. Customers either tap the device or wave their phone nearby.

"This is the next evolution of mobile banking," Burke said. "We are evolving to meet our customers' needs."

The pilot program comes as Bank of America is revamping its consumer banking business to deal with financial reform measures crimping revenue. The bank recently rolled out an eBanking account that is free to customers who don't use branches or receive paper statements.

Bank of America is the biggest bank to test the smartphone technology. Credit card companies and phone companies are also exploring these type of payment methods.

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