Telco-firms unite for contactless m-payments venture

A growth industry

For the first time, US telco-firms, AT&T, Verizon and T-Mobile, have teamed up on a contactless mobile payments venture.

The three mobile carriers are essentially working together in a bid to displace credit and debit cards with smartphones, posing a new threat to Visa Inc. and MasterCard Inc.

According to Bloomberg, the partnership would see AT&T and Verizon Wireless have equal stakes, with Deutsche Telekom subsidiary T-Mobile USA holding a smaller share. The entire project is currently looking for a chief executive officer.

The plan is to be trialed at stores in Atlanta and three other U.S. cities that would let a consumer pay with just a tap of their smartphone, Bloomberg's sources report.

It is the mobile industry's biggest attempt so far to boost m-payments in the US and replace the hoards of plastic credit and debit cards in the country.

Growth of m-payments

The rise of the smartphone has managed to get into many sectors such as web browsing and GDS street navigation, but in recent months it has been all about using smartphones to pay for goods making the hi-tech devices firm rivals to the likes of Visa and MasterCard.

The service is already available in Japan, Turkey and the U.K and would enable U.S. consumers to complete purchases in store with just a wave of their smartphone. For the mobile carriers, any payments would be processed through Discover's payments network, currently the fourth-biggest behind Visa, MasterCard and American Express Co.

According to the sources, for the carriers it would be Barclays bank who would help manage the accounts. Bank spokesman Kevin Sullivan was even quoted as saying, "facilitating mobile payments is a big part of Barclaycard's strategy globally."

If the rumours turn out to be true, it could be a race for market ownership. MasterCard and Visa, not wanting to be left out in the cold, have been reportedly investing in their own mobile solutions. However for now, m-payments has reached a ‘tipping point' with most than half of U.S. consumers saying they will use mobile financial services within five years. Time will tell who gets their custom first.

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