Wireless carriers using contactless payment technology for Smartphone credit card processing could give charge card corporations a worthy competitor. AT and T, Verizon and T-Mobile are preparing to take on Visa and MasterCard by developing their own mobile payment system that lets customers purchase goods by waving a Smartphone in front of a wireless reader. After fighting with credit card corporations for years over excessive swipe fees, retailers are viewing the new competition within the payments market with satisfaction.
Smartphone charge card processing an emerging trend
Development of a payment service network with the potential to supplant plastic with Smartphone’s is being tested in Atlanta and three other cities. The service, Bloomberg reports, is modeled after payments networks in Japan, Turkey and also the U.K. that use contactless technology. One business analyst told Bloomberg that the AT and T/Verizon/T-Mobile Smartphone credit card venture was a “game changer” because the wireless carriers are the biggest recurring billers in each and every market and are experts at processing payments. The carriers have signed up Discover, the number four charge card business after Visa, MasterCard and American Express, to process the mobile payments.
Hackers lurking to disrupt contactless payments in U.S.
Contactless payment features are available in 60 percent of Smartphone’s in Japan. If Smartphone bank cards take off within the Americas, hackers may have added motivation to focus on cracking the system. And consumers will need the same protection for their Smartphone’s that they have against unauthorized purchases with lost or stolen bank cards.
Billions at stake in mobile payments competition
The phone carriers have business in the race for a piece of the mobile payment market. ChannelWeb reports that credit card corporations and technology firms have stepped up the pace of their mobile payment initiatives as the Smartphone marketplace has boomed. Their background in payment processing makes wireless carriers believe they have an edge. However, Joe Bardwell, an executive at a California wireless tech firm, told ChannelWeb that servicing merchant accounts directly as a payment service is a far cry from processing payments for their customers. Another hurdle for wireless carriers processing their customers’ credit card payments is that a large percentage of them feel burned by their billing practices.
Retailers endorse a payments market option
Another payment service network could take off with retailers, especially after they have fought with credit card businesses for years over transaction fees. To emphasize that fact, Bloomberg cites an effort by retailers last month to gain caps on swipe fees from Congress, also as a 2005 federal anti-trust lawsuit that remains pending . A secure and reliable competing network that gives consumers mobility payment opportunities and reduces retailers’ costs would be welcome, a spokesman for the Retail Industry Leaders Association said within the Bloomberg article. In the Bloomberg article, an official from the Retail Industry Leaders Association said merchants will welcome one more payment network that saves them money and gives consumers a secure, reliable, convenient purchase option.
Further reading
Bloomberg
bloomberg.com/news/2010-08-02/at-t-verizon-said-to-target-visa-mastercard-with-smartphones.html
Tech News World
technewsworld.com/story/70546.html”
Channel Web
crn.com/mobile/226500140″>
