Discover, Telcos plan mobile payment venture

By Reuters
Posted Nov. 15, 2010 at 3:29 p.m.

Mobile phone companies Verizon Wireless, AT&T Inc and T-Mobile USA are poised to announce plans for a venture offering mobile payments services, people familiar with the matter told Reuters on Monday.

Discover Financial Services and Barclays will also announce they are participating in the joint venture, which will allow consumers to pay for purchases with their cellphones, the people said.

The announcement of details of the venture, including the appointment of a chief executive, is expected to come as early as Tuesday, the people said.

The joint venture could threaten dominant transaction processors Visa Inc and MasterCard Inc, who currently process most U.S. credit and debit card payments.

Major banks, mobile phone companies and card processing networks are vying to enter the emerging U.S. market for smartphone payments, which some say could eventually replace credit and debit cards as a primary means of payment.

Representatives for the five companies involved in the venture declined to comment.

Discover shares were up 1.7 percent at $18.91 on Monday afternoon and AT&T shares were up 1 percent at $28.75. Visa and MasterCard shares fell less than 1 percent.

Verizon Wireless is a venture of Verizon Communications Inc and Vodafone Group Plc. T-Mobile USA is a unit of Deutsche Telekom AG.

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