AT&T and Verizon to Take on MasterCard and Visa

As subscription growth slows, wireless carriers are desperately searching for new ways to make money in the U.S. Sprint-Nextel (S), AT&T (T), Verizon Wireless and T-Mobile have roughly 275 million customers among them and they've pretty much exhausted many of the traditional ways of making revenue (i.e; fees for data and video). In fact, heated competition among the carriers has forced them to lower the cost of their plans in order to retain customers.

But AT&T, Verizon Wireless and T-Mobile have a plan: move into wireless electronic payments. Bloomberg reports: "The trial would be the carriers' biggest effort to spur mobile payments in the U.S. and supplant more than 1 billion plastic cards in American wallets."

The idea is that customers will be able to purchase items just by waving their smartphone. The first tests will take place in Atlanta and three other U.S. cities. By embarking on this business path, however, the carriers will be taking on some formidable competition, including Visa (V), MasterCard (MA), American Express (AXP) and PayPal. Retailers who pay a small percent of each credit card transaction to Visa or MasterCard may be ready to help the new venture if it will mean a reduction in their fees.

Electronic payment is considered the next big frontier in wireless services and several companies are trying to get a piece of the market. Search companies Google (GOOG), Yahoo (YHOO) and Microsoft (MSFT) are battling for market share, while app stores, led by Apple (AAPL), are fighting for software downloads.

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dav42702

Mr. Mcintyre forgot to mention that this technology has been used in Japan for many years. People there can point their phones at a vending machine, punch in their pin number, out comes the item and the charge is paid with your phone bill.

August 03 2010 at 9:55 AM Report abuse rate up rate down Reply
Harry Hurt

Watch out! Credit cards are already a bad gimmick. Don't get in high debt over the phone. What's next? Driving while paying bills?

August 03 2010 at 9:52 AM Report abuse +1 rate up rate down Reply
gurusoldier

Great another system even more unsecure than using a credit card and even easier to not only steal from but to gather even more personal data via hacking!

August 03 2010 at 9:41 AM Report abuse +1 rate up rate down Reply
whodo1952

The world has lost it's collective mind! I run far and fast from technology which insists on compromising my common sense and my privet time. Phones not only track you, they take your mug shot while doing so, while the images they capture end up on the cave walls of cyberspace. This is why phones double as cameras. The "once upon a time" being mugged for a pair of shoes, has morphed into being mugged for your phone.
And now all you would have to do is "wave" your phone in front of a machine and be charged for a purchase takes YOU out of the picture as any "drone" can do this! Listen up people, technology comes first, then comes the application. Cyberspace has always been here, inside a carbon core! We broke in through window 7 to stabilize it's platform and now, so it goes. We are all the unaware victims of an "inside" crime "wave". An "intel / inside" crime!!! We have all been hacked! The 10 year old physics paper, "the Allidile / Report / Message," tells you who "they" are and how "they" did it, and the final choices you are soon, going to have to make about yourself and true knowledge! It's time to WAKE UP!!!Carolyn Herring

August 03 2010 at 9:21 AM Report abuse +1 rate up rate down Reply
Michael

Yep, the super rich vultures are getting in line to make even more off of their slaves the public. NO! Leave the ATM card alone, things like it and paypal help
people a lot, everything should not be under a faceless control, we are losing all personal touch, don't jump on board with this without thinking really seriously
about it.

August 03 2010 at 8:55 AM Report abuse +1 rate up rate down Reply
jking90404

I don't have a smart phone and know nothing about one. T-Mobile don't do it.

August 03 2010 at 8:22 AM Report abuse +3 rate up rate down Reply
T REXX

better keep your land lines or haven't you been reading all this info about dropped calls. only trust a fiber or cable connection.the rest come and go.If you drop land line will cost 500 to reconnect..and that will keep you on their wireless plan..that's their plan people from an insider.

August 03 2010 at 7:12 AM Report abuse +1 rate up rate down Reply
NicktheMan

Why should I have to buy a smart phone and pay 100 bucks a month just to do credit card transactions? I think they should make it available to people who actually own these phones, but it shouldn't be mandatory for people with limited income to have to purchase a phone in order to make any credit card purchase. That is just plain dumb!

August 03 2010 at 7:12 AM Report abuse +6 rate up rate down Reply
2 replies to NicktheMan's comment
Jef

also, what happens when your battery dies? or what about dropped calls, now dropped payments?

August 03 2010 at 8:31 AM Report abuse +2 rate up rate down Reply
phunyuns

Nick, reread the article, this is for people who have smartphones, so they then dont have to carry a wallet I guess. Its not mandatory for anyone, even those with smartphones. You will still be able to use your regular credit card. I guess they think its an inconvenience to carry a smartphone and a credit card. I have a smartphone and still dont think I would use this service.

August 03 2010 at 3:48 PM Report abuse rate up rate down Reply
floridabased

Amen..eliminate the crooked,banks,credit unions credit card companies and oh yeah the probably crooked Credit bureaus

August 03 2010 at 6:12 AM Report abuse +2 rate up rate down Reply
1 reply to floridabased's comment
Jef

and rely on the crooked cell phone providers? no, thanks. your banks and credit unions look out for you more than at&t, verizon, and any cell company would. they are all businesses, so they are driven by the dollar, but what happens when you switch carriers? now you have to not just move your number but all your money or accounts? yikes!!

August 03 2010 at 8:30 AM Report abuse +2 rate up rate down Reply