AT&T, Verizon, T-Mobile Joining Hands to Replace Credit, Debit Cards With Smartphones

August 2, 2010, By Sanjeev Ramachandran

MasterCard and Visa may have a battle ahead with telecom carriers AT&T and Verizon Wireless lining up a new venture that could amount to doing away with credit and debit cards. Significant is the fact that smart phones will now take their place.

Apart from AT&T and Verizon, the venture aimed at bringing about this initiative will include T-Mobile too. They will work with Discover Financial Services and Barclays to test a system at stores in Atlanta and three other U.S. cities. The plan is to empower consumers pay with the smartphone for the purchases made. The effort is seen as boosting mobile payments in the United States. AT&T and Verizon are equal partners in the venture, while T-Mobile has a smaller pie in the venture.

The top card networks such as MasterCard and Visa sense trouble in their domain. The service would use contactless technology to complete purchases in stores and they would then be processed through Discover Financial’s payments network. Discover currently is the fourth largest company in this arena behind Visa, MasterCard and American Express. Meanwhile, Barclays would chip in with banking services so as to manage the accounts.

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