Bank of America testing new mobile payment system
Bank of America has chosen to abandon NFC technology in favor of a new, image-based technology it is currently testing. The system that the bank is testing is designed to be a mobile commerce solution that is an alternative to NFC technology. The system seems to have an immediate appeal to retailers interested in mobile commerce as it requires them to share nothing more than a simple image with consumers. This removes the need for expensive hardware and could win the support of retailers around the world.
Test of new system to be overseen by Paydiant
Bank of America’s trial of the system will last three months. Paydiant, a mobile payment startup, will be responsible for overseeing the use of the system amongst five retailers located in North Carolina. Relatively few details are available regarding the system and when Bank of America expects to make use of it on a larger scale. Bank of America does consider the system safe, however, which is one of the primary concerns currently surrounding the capabilities of NFC technology.
Image-based system expected to use QR codes
Because the system is image-based, it is expected to make use of QR codes or a similar form of technology. Online authentication is expected to be set up by Bank of America to regulate access to financial information. The system will make use of a mobile application that is able to access the financial information of a user and leverage this information to facilitate transactions for goods and services. The system does not make use of proprietary technology, apart from the authentication system being put in place by Bank of America. This means that the system will be accessible to a wide range of consumers and retailers interested in mobile commerce.
Bank of America avoids NFC due to security concerns
NFC technology has formed the backbone of mobile commerce for several years. Most of the world’s major banks and other financial institutions, as well as telecommunications companies, have invested heavily in NFC-based mobile commerce systems. Concerns regarding the security of the technology are beginning to gain momentum, however, causing many consumers and companies to question the viability of NFC in mobile commerce. Bank of America believes that it has found an alternative to NFC technology that will still allow it to enter into the changing world of mobile payments.
