Wireless carriers using contactless payment technology for Smartphone charge card processing could give charge card businesses a worthy competitor. Wireless heavyweights AT and T, Verizon and T-Mobile are gearing up to face off against credit card heavyweights MasterCard and Visa with a test of a mobile payments system in which consumers make a purchase by holding a Smartphone next to a wireless scanner. The competition within the payments market is welcomed by retailers, who have fought with credit card corporations over excessive swipe fees.
Smartphone credit cards catch on in United States
A payment service network to supplant credit and debit cards with Smartphone’s will start with a test technique in Atlanta and three other U.S. cities. Bloomberg reports the service, similar to those already available in Japan, Turkey and also the U.K., would use contactless technology. A business analyst was quoted by Bloomberg as saying that the Smartphone charge card venture is a “game changer” because wireless carriers have become experts at processing payments by being the biggest recurring billers within the market. Discover, the fourth largest credit card business after Visa, MasterCard and American Express, is handling processing for the new payment service network.
Obstacles to contactless payments in the Americas
More than 60 percent of Smartphone’s have contactless payment functions in Japan. If Smartphone charge cards take off in the Americas, hackers can have added motivation to focus on cracking the technique. And consumers will need the same protection for their Smartphone’s that they have against unauthorized purchases with lost or stolen bank cards.
Intense competition ahead for mobile payments profits
The phone carriers have company in the race for a piece of the mobile payment market. As the Smartphone marketplace has exploded, ChannelWeb reports that mobile payment programs have accelerated at bank card corporations and other tech firms. The carriers think they have an edge with their background in payment processing. But it remains to be seen if processing payments for their customers will translate to servicing merchant accounts directly as a payment service network for the carriers, Joe Bardwell, an executive at a California wireless tech firm, told ChannelWeb. Also, the billing practices of wireless carriers may not earn the trust of their customers to process their bank card purchases.
Retailers eager for an option within the payments market
Another payment service network could take off with retailers, especially after they have fought with charge card corporations for years over transaction fees. The Bloomberg piece calls out a pending 2005 federal antitrust lawsuit, as well as a push by merchants last month to get Congress to enforce caps on swipe fees . A spokesman for the Retail Industry Leaders Association told Bloomberg that a secure and reliable competing network that gives consumers mobility payment opportunities and reduces retailers’ costs would be welcome.
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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″>
