AT&T and Verizon Wireless are reportedly working with Discover Financial Services and Barclays on a smartphone-based payment system intended to replace credit and debit cards.
The carriers, along with T-Mobile, are prepping a test of the system in Atlanta and three other U.S. locations, according to Bloomberg. Rather than swiping a debit or credit card, buyers would wave their smartphones in front of a contactless payment system.
"We have nothing to share other than to say that Discover is always evaluating technology solutions that make things faster, safer, and more convenient for card members, merchants, acquirers and issuers," a Discover spokeswoman said in an e-mail.
A Verizon spokeswoman said the company had nothing to announce. AT&T did not immediately respond to a request for comment.
If successful, the move could put wireless carriers in competition with the likes of Visa and MasterCard, Bloomberg said.
The tech landscape, however, is littered with pay-by-phone efforts, leading one to wonder how this project will be any different from past initiatives.
In 2008, Visa partnered with Nokia for a smartphone-based payment system for those with Chase Visa cards. To activate, users needed a phone with a Near-Field Communications chip, or a wireless smartcard that only works at a range of about four inches. But as PCMag mobile analyst Sascha Segan pointed out at the time, NFC has been around since 2003, and pay-by-phone trials in 2006 and 2007 went nowhere.
MasterCard announced a similar initiative in 2008 that would let banks install payment cards into a client's mobile phone. More recently, MasterCard announced last month that is MoneySend mobile payment service, which was introduced last year, is now available via the iPhone and iPad. It allows for person-to-person money transfers over-the-air.
In 2009, Nokia announced Nokia Money, a pay-by-phone service that would target users in emerging markets who have a phone but no bank account.
In December 2009, meanwhile, Twitter co-founder Jack Dorsey launched Square, a mobile payment system that lets users process credit card transactions by phone.