Rogers communications, the Royal Bank of Canada (RBC) and VISA will launch the consumer phase of their mobile phone payment pilot project in mid-2009. Between now and then, limited trials involving small numbers of employees from the partner companies will be conducted to iron the wrinkles out of the phone side of the technology.

The system will ultimately allow users to pay for small purchases at a variety of locations such as restaurants and convenience stores, or from vending machines, simply by waving their cell phones at a wireless payment terminal. Rogers, RBC and VISA explained in detail how the VISA payWave system will be implemented in cell phones in a joint news release this week:

“Pilot participants will be issued specially-equipped mobile phones that can simply be waved at Visa payWave-enabled checkout readers at select retail stores and quick-service restaurants in Toronto’s downtown core.”

Phones used in the pilot trials will be outfitted with technology similar to that used in the new contactless ‘smart’ credit cards:

“Motorola mobile phones outfitted with Near Field Communication (NFC) contactless chips will enable customers to make purchases using the Visa payWave feature just as they would with a contactless RBC Visa card. The functions tested in the pilot will include the secure delivery and storage of account information to the mobile phone and the security of mobile payments at retailers.”

The consumer pilot program will also gather information about how users view the payWave system and how they prefer to use it.

Phone-based payWave service is not expected to be launched officially until 2010 or later. However, RBC, ScotiaBank and other VISA partner institutions are already deploying smart VISA cards containing payWave-compatible NFC chips.