AT&T Smartphone Payment System
AT&T is starting to develop a new system so that consumers will be able to use their cell phones as credit cards. They announced that a deal had been made with the mobile-payment companies Boku, Zong, and BilltoMobile. Consumers who use this new product will be able to buy all kinds of digital products such as music, movies, and games, by simply typing a number into their phone. The actual price and payment will show up on the consumers phone bill, and this system would be used instead of someone using PayPal or a credit card. Mobile purchases like this have been slow to get moving in the US mainly because carriers have demanded too much. Most have wanted up to forty percent of the purchase, which does not leave the seller with a whole lot of room to make money.
Boku, from San Francisco, and Zong, from Menlo Park, have made most of their money through applications such as this on facebook. These applications have been successful because the production costs are low enough to allow the sellers to make money even after having to deal with the fees from the carriers. Boku’s Senior Vice President says that they are taking “huge steps toward making mobile payments a ubiquitous checkout option online, right next to credit cards”.[1] They also expect to have many more items for sale within the next month that can use this technology.
The Vodafone Group in Britain made a similar agreement with Boku earlier in the month. This is not AT&T’s first venture into the mobile-payment market. Three people with knowledge of the plan said in August that AT&T and Verizon Wireless had planned to test a system at their stores in Atlanta that would allow consumers to pay with a simple wave of a smart phone. The BilltoMobile company is also a part of AT&T’s trial.
This new technology could be very useful and make a big difference. The simplistic nature of simply needing to put a number into your phone to pay for something would make it perfect for anyone with a phone. In a time where technology changes so much and people constantly have to adapt and learn how to work their new gadgets, and system like this would not require that type of hassle. Someone would just have to know how to put the number in, and how to pay their cell phone bill. As long as the carriers can cut down on their fees so that the sellers could make some money, this system could be useful and could take off.
Visa Europe and Turkey’s Akbank called In2Pay, which uses a microSD card inserted into a cell phone. It used Near Field Communication as a contactless way of making the payment.[2] The only problem with this right now is that not many cell phones use this NFC technology. This is just another example of this new technology and how it is moving forward. Pretty soon people will no longer have to reach for their credit cards, and instead will just have to wave their smart phone.
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