"Will you be paying with cash, card, or electromagnetic wave?" This may soon be the question you're asked by vendors as smartphones begin to be used as a means of payment. Major wireless carriers Verizon and AT&T are entering into a partnership to allow their customers to pay for products using their smartphones, according to sources who spoke to Bloomberg. T-Mobile is also a part of the agreement. How might this change the world we know?
First, it must have Visa, MasterCard, and American Express a little worried. News like this is the last thing they need on top of all the regulation coming out of Washington recently. They may soon understand how Garmin and TomTom feel, with GPS services largely displaced by smartphones. But at this time, a third party payment system appears necessary for processing -- it's just reportedly with Discover and Barclays instead of the others. Yet, Bloomberg quotes one analyst that implies these cell phone companies could to do most of work:
"This is definitely a game-changer," said industry consultant Richard Crone of San Carlos, California-based Crone Consulting LLC. The firm advises card networks, issuers and phone companies. The mobile carriers "are the biggest recurring billers in every market. They are experts at processing payments," Crone said.
The convenience factor here couldn't be more obvious. How great would it be to only need your phone to pay for stuff, and not any credit cards? After all, you probably take your phone everywhere you go by now anyway.