No more worries about having your credit card with you. Just have your phone and you can get gas at the pump or buy groceries at the store. This will soon be a reality as it was reported today that AT&T and Verizon Wireless are planning a venture to displace credit and debit cards with smartphones. This new venture is reportedly posing a new thread to Visa and Mastercard.
The partnership is said to work with Discover Financial Services and Barclays Plc to test a system for stores in Atlanta that would let a consumer pay with their contactless wave of a smartphone. Right now about 1 billion plastic cards are being circulated around America as Visa and Mastercards and a successful trial of this system will help boost not only sales of the smartphones but a new revenue stream might begin for the wireless carriers.
If the trial is successful, AT&T and Verizon will compete directly with two of the world’s biggest payment networks, Visa and Mastercard.
Mobile carriers are experts in payment processing becuase they are also one of the biggest recurring billers in every market. Visa and MasterCard handled about $2.45 trillion which is about 82% of the U.S. consumer spending last year.
Amazingly a similar service is already available in Japan, Turkey and the UK where consumers use contactless technology to complete purchases in stores. The payments are processed through Discover’s payments network.
Along with AT&T and Verizon, T-Mobile is also reported to have a smaller stake in the venture.
It is amazing what smartphones have been doing lately, from making phone calls to being able to send emails to GPS maps and now they are your credit/debit cards.
Consumers would love the idea of having your phone do just about everything.