Mobile Phone Will Act Like Credit Card

by mohit on August 12, 2010

Imagine you are standing at the payment counter after doing lots of shopping and just when you dig your hand inside your pocket to reach for your wallet, to your horror, you’ve forgot to carry your wallet and henceforth the credit card with which you were about to pay. How not to face such embarrassment and antipathy in future? Pay through your mobile phone.

Seems that i am not talking sense. But, it is true. Imagine swiping a mobile phone to pay for all the things that you buy. This has just been made possible by latest technology that allows bank information to be stored in your mobile phone’s memory card.

AT&T Inc. and Verizon Wireless, the biggest U.S. mobile carriers, are planning a venture to displace credit and debit cards with smartphones and are aiming to replace more than 1 billion plastic cards in American wallets. After encroaching on the tasks ranging from Web browsing to street navigation, smartphones may now help to spur mobile payments in the U.S. posing a direct threat to San Francisco-based Visa and MasterCard, the world’s biggest payments(plastic money) networks.

The nation’s two largest cell phone operators are planning an alliance with the credit card company Discover Financial Services and global bank Barclays to create this new service where these two are believed to be equal partners in the venture with T-Mobile-the fourth largest wireless operator in the U.S likely to hold a smaller stake. The companies are supposedly gearing up to test the new service in stores in Atlanta and three other cities.

The technology however, is not found to be new as its already been used in Japan, Turkey, and the U.K. The technology has also been tested in the U.S. for several years. Nokia and MasterCard launched a trial in the U.S. in 2003. In 2006, Cingular, which is now AT&T, teamed up with Nokia and financial institutions Citigroup and MasterCard to test new phones with MasterCard PayPass contactless payment capability.

This time around, only the alliance members seems to have changed. It looks like AT&T and Verizon Wireless are working with Discover instead of Visa and MasterCard.

So just stay alert and we’ll keep you in touch with any updates on this news.

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