U.S. Bank offers a wave of the phone to replace a swipe of the card

U.S. Bank wants you to substitute a wave of the cellphone for a swipe of the credit card when making retail purchases.

The service, which is aimed at technology early adopters and business travelers, is based on a wireless technology widely used in Europe and Asia in place of magnetic stripe credit cards, which are considered more vulnerable to fraud, U.S. Bank officials said. The cell transactions are protectively coded, or encrypted, while credit card purchases are not.

The bank's Go Mobile Payment Service requires an iPhone 4 or 4S that is equipped with a special app and a custom iPhone protective case that contains a computer chip. The chip uses a technology called Near Field Communication to interact with a wireless checkout terminal at a retail store. When software on the phone is activated, waving the phone within less than inch of the terminal completes a purchase. Wireless purchases are charged to a U.S. Bank credit card account.

"The technology hasn't gone mainstream in the U.S.," said Todder Moning, U.S. Bank's senior vice president of payments innovation in Minneapolis. "When I use it, people always say they've never seen someone use a phone that way."

But to use the service, the customer must sign up for a U.S. Bank FlexPerks Travel Rewards Visa Signature card, which contains a computer chip to store personal information. U.S. Bank will then send the customer a free iPhone case. Customers must also download the free U.S. Bank Go Mobile app from the Apple iTunes store to use the case's features.

But the bank is swimming upstream with the advanced service. The New York Times reported in February that U.S. consumers are hesitant because they don't think it offers an advantage over familiar credit cards and there are several competing technologies that leave them confused.

Other similar companies include Square, which makes a tiny mobile credit card reader for smartphones and tablet computers, and which has a partnership with Starbucks; a planned mobile payment network called Merchant Customer Exchange supported by Best Buy, Target, Wal-Mart and other retailers; Isis, a mobile payments network collaboration by AT&T, Verizon Wireless and T-Mobile USA; and Sprint, which has its own system.

Moning agreed that adoption of wireless retail transactions has been slow in the United States, and said that well under 20 percent of retailers in the nation have such wireless terminals.

One factor that's likely to drive U.S. acceptance of Near Field Communication is the adoption of new retailer liability rules by Visa, MasterCard and American Express in 2015, Moning said. Retailers who don't install the wireless checkout terminals will be liable for a fraud loss if having a wireless terminal could have prevented it, he said.

To make U.S. Bank's Mobile Go service as widely applicable as possible, it's compatible with several types of wireless retail terminals, including those from Visa, Isis, MasterCard, American Express and Discover.

Before introducing the service in Minnesota, U.S. Bank tested it in Salt Lake City and Portland, Ore. Moning declined to say how many customers used Go Mobile service in the test marketing.

"Demand is growing, and we're happy with what we're seeing," he said.

It remains unclear whether consumers will like waving their phones to complete transactions. But Moning said the Near Field Communication technology could allow retailers to send special offers directly to customers' cellphones, help customers find and return products and even help them discover friends who are shopping nearby.

"In time, you'll be able to take a product off a shelf and walk out of the store without checking out," Moning said. "Your phone will be charged for the item as you walk out the door."