Mobile payments have experienced huge growth in recent years, more and more apps are equipped to help you make a transaction without the need to key in your credit card number. Whilst it has been easy to make virtual payments, in-store purchases via mobile devices has taken a little longer to gain traction but that might be about to change.
In a partnership between US mobile carriers AT&T and Verizon, which also includes T-Mobile USA, contactless technologies are being developed to transform modern day smartphones to incorporate their own methods of payment, with the view to directly compete with credit companies such as Visa and Mastercard.
The initiative will completely disregard technolgies offered by Visa and Mastercard, instead choosing to partner with Discover Financial Services to process payments and Barclays Ltd to handle the accounts. The carriers will look to test a system in stores in Atlanta and three other US cities, where customers will have the option of paying for their purchases using their smartphone.
The new system will mean stores will need to incorporate new payment terminals in order to handle the payments but it isn’t clear just how smartphones will be enabled to use contactless payment methods. Existing technologies include stickers, cases and systems where the customer can use their phone number to complete a purchase. It is estimated the terminals will cost retailers around $200 and mobile manufacturers $20 to incorporate the new technology into their phones.
At the moment the partnership looks to be US-only but if testing in Atlanta is successful, you could see many more mobile companies rolling out new payment systems worldwide.