In a partnership that could threaten the very existence of transaction companies like Mastercard and Visa, AT&T and Verizon are learned to be talking to other major network carriers including Deutchs Telekom – the company that owns T-Mobil USA to bring a contactless mobile payments system. For the first phase, the companies are working in partnership with Discover Financial Services and Barclays Plc at a store in Atlanta and three other US cities.
Though the new partnership is in its early stages, the threat from such a partnershipis quite palpable. Visa and Mastercard contributed to nearly 82% of consumer spending using cards in 2009. An alternate payment system that will do away with plastic cards and instead make use of the consumers’ smart phone could not only be an easier payment system, but has the potential to gain traction in a short time.
AT&T (NYSE:T) and Verizon Wireless (NYSE:VZ) are equal partners in the new venture while T-Mobile is learned to have a smaller stake.