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Joint ventures with phone carriers signal movement for mobile payments

Dec 14, 2012 Dave King

Joint ventures with phone carriers signal movement for mobile payments
The convenience of paying bills or buying online using a smartphone may be just the carrot that mobile service providers need to win over new customers, according to
 The website reports that wireless carriers are establishing partnerships with smartphone manufacturers. Recent joint ventures have been formed between AT&T, Verizon and T-Mobile and mobile payments network Isis in the United States while Rogers and Bell are teamed up with the Telus network in Canada. But until consumers are convinced that making financial transactions with ACH cards, prepaid debit or credit cards are always secure, some partnerships may face trouble while trying to win them over. As Isis CEO Michael Abbott told, consumers have to believe that the carriers and their partners are securing their wireless networks before they will sign on to a new phone deal. "Our belief is you have to first get people comfortable with making payments with the phone," he said. "Part of what we need to do is make sure that people have a sense of security … that it's not just a sticker on the back of a phone, some open, software-based protocol. It's a hardware-based, secured, locked-down payment system they can trust." NFC emerging
The emergence of near field communication (NFC), a standard for smartphones and other mobile devices that establishes radio communication for mobile payments and data exchanges, is also broadening the use of phone transactions. With the first NFC-enabled mobile payments launched recently in Canada, it's just a question of time before all carriers will be able to offer the technology. In the meantime, SeekingAlpha reports that service providers have concentrated on lining up financial institutions, phone manufacturers, merchants and point-of-sale providers to allow for this type of payment as NFC progresses with smartphones. However, there is a power struggle brewing over NFC-enabled mobile wallets, the website reports. Service carriers want the payments security chip in the phone's SIM card, while manufacturers prefer to place it in the device so they can earn a profit from it. Since carriers primarily control the sale of phones that go with their services, they appear - at least for now - to have the upper hand. Only one thing seems certain. Seeking Alpha projects that future sales of mobile phones will hinge greatly on which providers offer the most secure service for consumers and the companies to which they send electronic payments.