Bank card corporations face a formidable foe in wireless carriers investigating contactless payment technology for Smartphone bank card processing. 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 technique in which consumers make a purchase by holding a Smartphone next to a wireless scanner. The competition in the payments market is welcomed by retailers, who have fought with charge card companies over excessive swipe fees. Resource for this article – Smartphone credit card processing shakes up payments market by Newystype.com.
Smartphone charge cards catch on in U.S.
A test technique in Atlanta and 3 other cities marks the beginning of a payment service network that advances beyond bank cards. 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 the AT and T/Verizon/T-Mobile Smartphone credit card venture was a “game changer” since the wireless carriers are the biggest recurring billers in each and every 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.
Contactless payments must clear hurdles
More than 60 percent of Smartphone’s have contactless payment functions in Japan. If Smartphone charge cards take off within the U.S., hackers could have added motivation to focus on cracking the system. As with credit cards, consumers will need to be protected against unauthorized purchases with lost or stolen Smartphone’s.
Intense competition ahead for mobile payments profits
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. 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. One more hurdle for wireless carriers processing their customers’ bank card payments is that a large percentage of them feel burned by their billing practices.
Competition in payments market welcomed by retailers
Retailers could gravitate to another payment service network after years of fighting over transaction fees set by Visa and MasterCard. The Bloomberg piece calls out a pending 2005 federal antitrust lawsuit, also 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 possibilities 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″>
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