AT&T and Verizon are testing a new feature designed to “supplant more than 1 billion plastic cards in American wallets” – by letting people make traditional credit card purchases using their cellphones!
It seems like a glimpse of the future, but it’s already in place in Japan, Turkey and the U.K., with smart phones simply being waved over a reader to complete in-store purchases. “This is definitely a game-changer,” an analyst told Bloomberg news, saying that already cellphone carriers are “the biggest recurring billers in every market. They are experts at processing payments.” And the concept is already being cheered on by retailers. “We have long argued that real competition is missing from today’s payments market,” one industry spokesperson added.
Plus, the cellphone carriers are attacking when credit card companies are already being reviled for their dishonest disclosures on penalty fees. (Today Forbes cited a new study which shows that some credit cards “no longer provide full disclosure of the terms of the penalty rate, or fail to correctly follow disclosure requirements required by the new Federal Reserve rules.”) Consumers are already experiencing raised hopes that federal stimulus cash can somehow eliminate credit card debt. “Mobile payments are the logical next step for consumers,” an AT&T spokesman told Bloomberg, and another financial analyst seemed to agree. “What is a cell phone, except a mechanism for consumers to address their lives in whatever way they choose? There’s certainly no reason if an AT&T account can effectively be carried on a phone that a JPMorgan or a Wells Fargo card can’t be there, too.
“In fact, the antitrust issues would demand that that be allowed!”