Thursday, May 5, 2011

Carriers, Credit Cards Team Up on Mobile Payments

Wireless carriers have scaled back their mobile payment plans, choosing to cooperate with major credit card companies rather than compete with them.


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A joint project of AT&T, Verizon and T-Mobile to offer phone-based payments, known as "Isis," is working with Visa and MasterCard, which together control more than three-quarters of the credit and debit card market, to offer an e-wallet solution on their smartphones.
Instead of creating a separate payment network and maintaining accounts directly with the carriers, the less ambitious plan will let customers use an existing Visa, MasterCard or other credit card account to pay for goods.
Isis will monetize its system either through a much smaller transaction charge, since it will be sharing with the credit card issuer, or perhaps by taking cuts from mobile coupons and advertising targeted on location and purchase history.
Isis was initially ambitious in making money directly from transactions, essentially cutting credit card companies out of the loop.
But it now seems certain that even if plastic credit cards fade in importance, the companies issuing them will remain at the center of whatever mobile payment solutions emerge. The burgeoning mobile payments space looks like a who's-who of mobile technology with virtually everyone in the industry interested in capitalizing on e-wallet technology.
Google, which partnered with MasterCard and Citigroup, hopes to offer an NFC-enabled mobile payment system on Android phones. Microsoft, meanwhile, is reportedly bringing NFC payments to its Windows Phone platforms.
Samsung and Visa will trial their own NFC system at the Olympics next year as well, while Research in Motion is adding e-wallet technology to all its smartphones.
Conspicuously absent so far is Apple, which reportedly plans to get in the game sometime, but not with the iPhone 5.
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