AT&T, T-Mobile and Verizon, the wireless giants of America are taking on the giants of the credit card industry, MasterCard and Visa. They reportedly have come up with a system that will let the consumers make the payment with a contactless swipe of the smartphone. However, it doesn`t look like MasterCard or Visa is going to cede their customers so easily without giving a fight. The only question that remains to be answered, is can the all encompassing cell phones really replace the love for plastic among Americans.
According to reports the wireless telecoms Verizon At & T are partnering Barclays, the British bank and Discover, which is the number 4 servicer in the country of credit cards, after Visa, MasterCard and American Express. Once the smartphone which could be Droid, iPhone or anything else is equipped with an RFID chip or radio frequency identification chip, you can afford to leave your wallet back at home and pay for all your purchases by waving your cell phone near a special receiver pad that is installed at checkout.
If this done in the right fashion, the RFID payments in cell phones could be way more secure that plastic according to Kim Eaton in Fast Company. As an example, you can use the screen of the phone as a super secure PIN pad or just tap your phone`s sensors to ensure that nobody is really stealing your money by using another cloned RFID chip. According to Brennon Slattery of the PC world, the RFID technology is not really immune to threats and there could be RDIF viruses too. In case one is not really concerned about these threats, there was always the case of RFID hacking underground that could cause quite a few problems and is something that needs solutions in the time to come.
Although no time frame has been given yet, the Verizon and AT & T venture will be tested in Atlanta along with 3 other cities in US without giving out a time frame. A substantial upfront investment would be required and it would need around 200 dollars per every RFID reader, big retailers however, are bullish on this technology as it could allow them greater interaction with shoppers. It will also bring some welcome competition to MasterCard and Visa which control around 82 percent of spending on general cards. It is expected to rope in 40 billion dollars per year in transaction fees.