Business Week: Smart phones will replace traditional credit card payment system

August 5, "Business Week" article points out, AT & T and Verizon Wireless intends to launch a mobile payment system, the mobile payment system may replace the traditional credit card payment system. It is estimated that Americans use credit cards now total about 1 billion, part of which may soon be replaced by smart phones.

According to three sources familiar with, AT & T, Verizon Wireless and T-Mobile intends to develop a smartphone using the mobile payment system, which could have a traditional credit card payment systems pose new threats.

Although the technical details yet to be perfect, but with this service, consumers can use when shopping smart phones to pay for. Transactions will be the fourth largest U.S. payment network Discover Financial Services to deal with. Informed sources said London's Barclays will help manage user accounts. The operators, Barclays and Discover representatives declined to comment.

Retail Industry Leaders Association (Retail Industry Leaders Assn.)'s Brian Dodge that the payment services market is now a lack of real competition. If you have a secure and reliable network competitors, and can reduce the cost of retailers, then retailers will certainly be welcome.

According to Nilson Report, said U.S. consumers are now more than half of the purchase transaction is to use a variety of bank cards and electronic payment means to pay, and when in 2003, this proportion is also only 36%. U.S. consumer spending last year, there are 3.1 trillion U.S. dollars of the money is paid by credit and debit cards, which use the Visa and MasterCard payments for the 2.45 trillion U.S. dollars, the share was 79%. Mercatus, according to Boston Consulting Group survey found that more than half of U.S. consumers and nearly 80% of the age of 18 years to 34 years of U.S. consumers will use mobile within 5 years of financial services.

Boston Federal Reserve Bank's policy paper in May, said the new payment system may encounter many obstacles, difficult to stand our ground rapidly in the United States. Report, unless the consumer was aware that there are enough businesses to accept mobile payment solution, otherwise they will not use the phone payment system; and for the business, unless the number of mobile payment system to achieve a certain number of consumers, Otherwise they would not use the mobile payment technology. Businesses must spend on each e-reader the purchase cost of 200 U.S. dollars, while the upgraded mobile phone with built-in microchip also makes the phone cost by 10 dollars to 15 dollars.

Visa and MasterCard are investing in developing their own mobile payment system.

Conclusion: AT & T, Verizon Wireless and T-Mobile ready to launch smart phone payment system may push the United States the rapid development of mobile payment technology.

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