Verizon, T-Mobile and AT&T have put the brakes on a plan to invade the territory of credit-card companies with a new mobile-payment service for smart phones. Instead, they might work with credit-card companies to create “mobile wallets,” according to the Wall Street Journal.
The Isis system would have taken credit cards out of the mobile-payment equation. In essence, a phone would be a customer’s credit card, and charges would appear on mobile-phone bills, eliminating the need to carry a plastic card with an account attached to it.
So why nix the plan? It seems that wireless companies believe they will have a better chance at success if they work with credit-card companies, not against them -- even though it means they may not be able to collect fees from retailers on a per-transaction basis as envisioned.
In a recent interview reported by the Associated Press, MasterCard CEO Ajay Banga said the future of mobile payments is tied to the cost of installing the technology that enables such transactions at retail outlets. If business owners are wary of the fees associated with mobile-payment technology, they won’t adapt. Retailers already have to pay “swipe fees” to credit-card companies every time a customer pays with plastic.
However, experiments with mobile-payment systems are likely to continue: Sprint is developing a payment network just for their customers, Google is also testing its own system, and other players like Microsoft are also busy with similar endeavors.
Pay-by-phone dialed back [Wall Street Journal]
Carriers Pull Back on Mobile Wallet Plans [Technologizer]
Report: US wireless carriers looking to replace credit cards [betanews]
On the Call: MasterCard CEO on mobile payments [Associated Press]