updated 07:55 am EDT, Mon August 2, 2010
US carriers to use NFC on phones for payment
Three of the larger US carriers are developing a smartphone-based alternative to a traditional credit or debit payment, sources claimed on Monday. AT&T, T-Mobile and Verizon are developing a Near Field Communication system like Japan's FeliCa. Buyers would swipe a phone with an NFC chip near a reader to pay for goods at stores rather than use a card.
Discover would handle the transactions, while Barclays would manage the accounts. Bloomberg didn't learn when the trials would start, but it did find that Atlanta and three other cities would be the first to test out the approach. A store reader would cost $200.
Whether or not the system will gain adoption in the US isn't known. Although very popular in Japan, NFC has had trouble gaining traction elsewhere. Nokia is optimistic about the technology and plans to make it standard on its devices, but other non-Japanese companies have yet to embrace it in earnest. Apple in particular has often resisted implementing technology in the iPhone that might be region specific. The technology often adds $10 to $15 to the already tight costs of a phone.
Near field wireless may nonetheless give the participating companies an edge, as a widely adopted system would put a greater importance on phones and would give Discover a expansion of its reach that would help fight much larger rivals American Express, MasterCard and Visa. With smartphones, payments would also have a two-way element that could push coupons or information after a purchase.