AT&T, Verizon Wireless and T-Mobile, three of the larger U.S. mobile carriers are teaming up on a new payment system aimed at displacing credit and debit cards with smartphones and near-field communication (NFC) technology. The service is similar to those already available in Japan, Turkey and the U.K., where consumers can pay with the contactless wave of their phones near a NFC chip reader rather than by swiping a magnetic card.
Discover would handle the transactions, while Barclays would manage the accounts, according to Business Week. The NFC chip reader would cost around $200, while the chip itself would add around $10 to $15 to a smartphone's cost. Whether or not the system will gain adoption in the U.S. is yet to be seen. Consumers have already been able to leverage similar technology with Visa payWave or Mastercard PayPass, while PayPal has been experimenting with BlingNation stickers that turn any device into an instant payment system.
The new carrier-backed mobile payment system could disrupt the status quo when it comes to credit card transactions, and give Discover a much needed boost to compete against larger rivals like MasterCard and Visa. Although no specific time frame was given, the report claims a trial of the system will be run at stores in Atlanta and "three other U.S. cities."