Five competing technologies are vying to provide new convenience for cell phone users. Voice, text messaging and smart phone browsers all can be used for making payments, and are attractive to vendors since they are open systems that can be harnessed easily. Closed systems include downloadable applications and a wireless chip, commonly referred to as NFC, short for "near field communications." These are more complex to pull off because they generally require coordination among various players, such as wireless carriers, banks and other vendors. U.S. banks and card firms have been testing NFC for six years, including a new pilot in India led by Citigroup.

Providers that have had success note that simplicity pays off, with open systems leading the way. That means tapping into what is already widely available. MobileNOW!'s system uses a touchtone response system to take calls, and text messaging to send authorizations. Their first time parking, drivers receive a text message with a personal identification number and password, which they later use to set up an account online, as they would with a highway toll pass.

"The initiatives that work do not necessarily rely on upcoming technology," Holland says. "A lot can be done with existing voice systems and text messaging."

ShortStop, a chain of four convenience stores in Boulder, Colo., completed a pilot of accepting mobile payments for gift cards earlier this year and plans to continue using it. It also uses existing technology. The retail chain has hired Mocapay, also of Boulder, which sells mobile platforms that use text messaging and existing terminals to send and receive gift cards. Mocapay installs software that is downloaded to the terminals. Users receive a code on their cell phones that can be typed in at the point of sale and the account is debited.

Kevin Grieve, chief executive officer of Mocapay and a former chief strategy officer at First Data Corp., says the payments system should not alienate banks since it doesn't displace interchange fees they collect. Mocapay makes money by charging a fee on top of the interchange involved with the gift card. The model assumes mobile payments will add more revenue and loyalty for merchants, increasing sales. Customers can use text messaging, a phone's browser, or an iPhone application to receive the data.

U.S. wireless carriers have yet to sell phones with them, but the chips have done well elsewhere. In Japan, for example, NTT DoCoMo, the country's largest cell phone carrier, has worked with merchants to promote use of payments using NFC chips embedded in handsets. The chip makes it possible for the phones to store data such as personal identification, bank account numbers, balances, credit account information and transit passes. The service, dubbed "Osaifu-Keitai," includes a mobile-phone-based settlement function using credit or prepaid electronic money. NTT DoCoMo has sold 30 million handsets with the chips since its introduction in 2004 through July 2008, the latest figures that are available. The phone company also struck deals through alliances with railroad companies, major convenience stores and supermarkets to develop platforms to accept the payments.

Yet no matter what technology works, banks need to start building a base to capture part of the mobile payments stream in the coming years, Crone says. "The bank must enroll the customer for some type of mobile self-service," he warns. "You need to get the mobile number ingrained in the fabric of the customer profile. If you don't have mobile banking capabilities, you must install it."

One place to start is with their Internet users. About 18 percent of Internet households reported that they have done some type of mobile payment, according to an October survey of 1,000 online users by Synergistics, an Atlanta consulting firm. Methods included online bill payment, transfers, "peer-to-peer" payments, online loan payments and online purchases.

Some banks are already well on their way. Bank of America has signed up 2.6 million active users since it started mobile banking in August 2007. It's new payments venture with First Data, which has gone to market with applicable NFC-chipped stickers that work on any phone, may be one to watch in terms of merchant uptake.

For other banks, the time is now. "We're in the early adopter stage of mobile payments," says Genie Driskill, the chief operating officer at Synergistics Research Corp. "The infrastructure is in place, based on the number of people that have cell phones and smart phones and are already using them for financial activities."