The mobile payment industry is expected to gain a strong foothold with consumers in the coming years as major financial institutions and cellular phone service providers combine to make it easier for consumers to take on credit card debt without reaching for their wallets, according to a report from CNN Money. Credit giants like Visa, MasterCard, Bank of America, Citi and U.S. Bank are all testing a version of the technology and expected to start rolling out their mobile payment systems in the coming months. In addition, AT&T, Verizon and T-Mobile have combined with Barclay's and Discover Financial Services to launch Isis, a near-field communication payment system.
"I definitely believe that the mobile wallet will eventually replace the plastic card – but it's going to take some time because consumer habits take a long time to change," Jane Cloninger, director of financial services consulting firm Edgar Dunn and Co. told the news agency. "But where before it's been a lot of discussion, we're at the point now where you're going to start seeing momentum toward it and going to see it move beyond the trials and into reality."
Many models of handsets containing the NFC chips necessary to complete such a transaction – which can be completed simply by waving a smartphone in front of a sensor – will be shipped this year, the report said. Google, the company behind the popular Android operating system, already has infrastructure in its latest operating system that allows for NFC data to be transmitted and received.
Companies that handle credit card debt currently make almost no money on mobile payment systems, but the industry could be worth as much as $22 billion by 2015, the report said.
The largest obstacle to widespread adoption of digital payments may be public trust of the new technology. A number of studies have found that many consumers say they are wary of attempting to take on credit card debt using an unfamiliar system. However, younger Americans have in general been more likely to give it a try.