AT&T and Verizon to Take on MasterCard and Visa
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.