Smartphones in wallets instead of credit cards!
By siliconindia   |   Thursday, 05 August 2010, 22:58 IST   |    5 Comments
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Smartphones in wallets instead of credit cards!
Bangalore: Americans are going to carry smartphones, instead of credit and debit cards in their wallets soon. AT&T (T), Verizon Wireless, and T-Mobile are planning to develop a mobile payment system that works with smartphones, reports Peter Eichenbaum and Margaret Collins of Business week. The test will take place at stores in Atlanta and three other U.S. cities. According to industry consultant Richard K. Crone, this would turn out to be a game changer. Using the service, customers would be able to make purchases by holding a smartphone in front of an electronic reader in stores. While Discover Financial Services (DFS), the fourth-biggest payments network in the U.S. behind Visa, MasterCard, and American Express will process the transaction, London-based Barclays (BCS) would help manage the accounts. According to Mercatus, a consulting firm in Boston, Visa and MasterCard accounted for $2.45 trillion, or 79 percent, of $3.1 trillion in U.S. consumer spending last year on credit and debit cards. More than half of U.S. consumers, and almost 80 percent of those between the ages of 18 and 34, will use mobile financial services within five years. The Federal Reserve Bank of Boston said that any kind of new payment system may face barriers that prevent the technology from taking hold quickly in the U.S. According to a report by the bank, consumers won't demand mobile payments "until they know that enough merchants accept them, and merchants will not implement the technology until a critical mass of consumers justifies the cost of doing so. Visa and MasterCard are also making investments in their own mobile payment systems. MasterCard has worked for years with carriers, handset makers, and banks on developing mobile payment technologies in countries around the world, including Japan, Turkey, and the U.K., said Chief Executive Ajay Banga.

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