Our Smartphone as our Credit Card?
August 5, 2010 3 Comments
Finally, our carriers have decided to join the 21st century to get on with the over due project that has been going on in the Europe and many of the Asian countries for the past three years. According to Bloomberg AT&T Mobility, Verizon Wireless and T-Mobile are all working on a smart-phone payment system using Near Field Communications (NFC) that would displace credit and debit cards.
The carriers would keep Visa, MasterCard and American Express out of the mix to work with Discover, the second-tier player for the payments network that processes all of the transactions. Barclays is lined up to manage the accounts, according to Bloomberg, which cited three anonymous sources for the story.
It sounds like the carrier’s partnership with Discover suggests that they are lining up against the major three credit card companies – mainly because of the fact Visa, MasterCard and American Express have their own plans for mobile payments.
Although the carriers might be incredibly strong and adept at recurring billing, I have very little doubt the three credit card companies are going to sit quietly, especially not when they controlled a combined 82% of U.S. consumer spending on general-purpose cards last year.
Just two month ago, Citigroup introduced MasterCard PayPass stickers that, when affixed to a mobile device, could process payments at the 230,000 merchants that already support MasterCard’s solution.
Visa is also already working with NFC technology, including partnering with privately held DeviceFidelity to integrate NFC chips into memory cards, which would be distributed to Visa customers.
American Express Co. recently hired Sprint Nextel’s prepaid chief, Dan Schulman, to expand its mobile payment options.
Anyway, I’m excited to see all of the new payment methods that are coming out. Hopefully, competition will drive down the fees the payment processors charge.