Smartphone bank cards gear up to compete with plastic

Wireless carriers using contactless payment technology for Smartphone bank card processing could give charge card companies 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. Retail associations, which have battled credit card businesses over excessive swipe fees, are welcoming the competition in the payments market.

Smartphone credit 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. Bloomberg reports that the service, similar to those already accessible in Japan, Turkey and the U.K., would use contactless technology. One business analyst told Bloomberg that the AT and T/Verizon/T-Mobile Smartphone credit card venture was a “game changer” as the wireless carriers are the biggest recurring billers in each market and are experts at processing payments. Discover, the fourth largest credit card business after Visa, MasterCard and American Express, is handling processing for the new payment service network.

Hackers lurking to disrupt contactless payments in U.S.

In Japan, more than 60 percent of mobile phones have contactless payment capability. But in the United States, Tech News World reports that fundamental issues to overcome include credit risk, banking regulations, security and liability. If they become popular in the United States of America Smartphone charge cards will draw increased attention from malicious hackers. As with bank cards, consumers will need to be protected against unauthorized purchases with lost or stolen Smartphone’s.

Billions at stake in mobile payments competition

The phone carriers have business within 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 companies and other tech firms. Wireless carriers believe their background in payment processing is a competitive advantage. 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 credit card purchases.

Retailers eager for an option in the payments market

One more payment service network could take off with retailers, especially after they have fought with bank card companies 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 in the Bloomberg article. Within the Bloomberg article, an official from the Retail Industry Leaders Association said merchants will welcome one more payment network that saves them cash and gives consumers a secure, reliable, convenient purchase option.

More on this topic

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

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