The largest U.S. wireless carriers, AT&T Inc, Verizon Wireless and T-Mobile USA, have decided against setting up a separate network for payments on transactions done by phones, the Wall Street Journal said.
Setting up a separate network would have proven to be too difficult and time consuming, two people told the WSJ.
The joint venture, known as Isis, had originally planned to siphon market share from Visa Inc and MasterCard Inc, by establishing its own payments network and collecting fees on every transaction conducted via mobile phones.
But Deutsche Telekom AG’s T-Mobile USA, AT&T and Verizon Wireless have now adopted a less ambitious goal to create a “mobile wallet,” that can store and exchange the account information on a users’ existing Visa, MasterCard or other card, the paper said, citing people familiar with the matter.
And this time around, the carriers are in talks with Visa and MasterCard to have them participate in the system they will embed in phones, in a bid to garner as many users as possible, people told the WSJ.
In November, Isis had said the network would use Discover Financial Services’ national payment network at its roughly 7 million U.S. merchant partners and that Barclaycard U.S., a unit of Barclays Plc, was expected to be the first lender on the network to offer mobile payment products.
The embrace of the major card companies was needed to avoid falling further behind in the race to establish a standard way for letting consumers pay for products with their cellphones, the paper said, citing sources.