The End of Credit Card Dominance?
According to a recent article from the Wharton School of the University of Pennsylvania, AT&T and Verizon are about to throw the dice in a bet that will put billions of dollars on the line. The companies, the two largest mobile phone operators in the United States, are expected to launch a pilot program to see whether their customers are ready to trade credit cards for smartphones equipped with similar swipe technology for making purchases. But will Americans want to put aside their comfortable relationship with plastic credit cards? And can they overcome security concerns about adopting a new payment system? Industry experts weigh in.
In the coming months, some American consumers will embark on an experiment that will finally begin to answer a question with multibillion-dollar implications for the nation's credit-card companies, mobile-phone carriers and tens of thousands of merchants doing business from coast-to-coast.
Will U.S. shoppers embrace the chance to make store purchases with a simple swipe of their smartphones? Such a system would eliminate the need to carry plastic credit cards and would accelerate the evolution of the mobile phone into an all-purpose device useful not only for talking, reading e-mail and listening to music, but also for handling financial transactions.
Yet, U.S. consumers have historically lagged well behind their counterparts in Asia, Scandinavia and elsewhere in adopting new uses for mobile devices. Many see the concept of one-swipe smartphone shopping as a potential security nightmare, a bad dream littered with such goblins as lost or stolen phones, erroneous charges, and invasions of privacy, courtesy of aggressive retailers.