Is Your Credit Card About to Expire, Permanently?
Smartphone Credit Card Processing Begins

New mobile smartphone credit card processing technology that will allow consumers to one day pay restaurant bills, buy products online, and even purchase an automobile simply by hitting a few keys on their phone is just on the horizon.

A new joint venture, named Iris, formed by mobile carriers AT&T, Verizon Wireless, and T-Mobile takes aim at the venerable plastic credit card. Iris is based in New York and is not the only player trying to make your smartphone more than just a communications device. A number of old line companies and several start-ups are working the mobile technology based credit card scheme already.

Palo Alto, California based Bling Nation has been using targeted deployments in several locations in both California and Colorado to educate consumers, businesses, and banks on the idea that a smart card attached to your mobile phone has huge advantages when compared the a plastic credit card.

The Bling Nation system uses a Bling Tag, which is a microchip filled sticker that attaches to your phone, to communicate with in-store technology known as Blinger terminals using secure near field communications technology. Basically you swipe your phone past the in-store device and the payment is made. The advantage here are lower fees paid by the store and a faster and easier transaction for the consumer.

Small business owners like the Bling Nation smartphone credit card processing technology because the one and half percent fee charged for each transaction is about half the rate charged by old line credit card companies. Another start-up product angled straight toward the small business market is the Square. This device fits into a smartphone and allows the user to swipe a credit card. This could be a super gadget for the business person who works alone and is on the road away from any support. Who knows maybe next time you pay your babysitter she’ll say, “Yes, I take credit cards”.

Two other big players involved in what is sure to be a battle royal for leadership in the smartphone/credit card arena include PayPal, who is currently implementing a smartphone application designed to use their services to pay bills on site and Google who is designing this technology into the next iteration of Android mobile software.

Smartphone or Credit Card?

So what is the point of all this discussion? Well, from the consumer perspective smartphone bill payment offers few advantages right now but in the near future it could be big. These days everyone seems to have a mobile phone with them at all times so what better place is there to also have your wallet? With that as a given, the first advantage of note is the ease of use this technology offers when compared to a plastic credit card. The bottom line is eventually this will be a simple swipe and go transaction—fast, easy, and secure.

Another advantage that pops to the top right away is the ability to buy an airline ticket or some other type of transport ticket and have the boarding pass sent right to your phone ready to be read upon your arrival at the airport or departure terminal. I have already seen and used similar technology to board a ferry across Long Island Sound, it sure made the boarding process easy.

Keeping real time track of spending with some sort of mobile application will undoubtedly be part of the technology as well. This is where things get important for readers who need to watch every penny they spend to keep from going into debt they cannot pay.

The other big potential upside for consumers with smartphone credit card processing technology is the chance that some competition will take hold in the consumer credit arena and offer up some real dollar savings to those using this new technology.