A large number of some of the nation’s largest retailers recently revealed that they would come together in an effort to make a mobile credit card payment system that allows consumers to turn their smartphones into a payment option.
Walmart, Target and more than 20 other major retail companies are now working on developing a mobile credit card payment platform that will compete with similar offerings from other companies, such as GoogleWallet and Isis, the joint venture from AT&T, T-Mobile and Verizon Wireless, according to a report from NACS News. Currently, the various other participants in the development of the retailers’ mobile wallet platformare unknown, but there are indications that one such company is Alon Brands, Inc., which operates more than 300 7-Eleven locations throughout Texas and New Mexico.
Steve Mott, who runs BetterBuyDesign, a Stamford, Connecticut-based consulting firm that is working with the retailers on the payment system, revealed the two dozen companies participating in the development of the payment system have an annual total revenue of $1.38 trillion, the report said. These retailers are in a variety of industries, ranging from big-box electronics to pharmacy chains and vending companies.
Target released a statement confirming that it was “exploring” this type of payment solution but would not share specific plans at present, the report said.
The companies’ stated reason for developing the system is that they are unsure of the security and privacy provided by the other offerings, the report said. In addition, they believe that the system will give them better insight into consumers’ behaviors and purchasing habits, and would, obviously, cut them in on transaction processing fees that are currently being lost to other companies. In all, some estimates show that the mobile payment system industry could be worth more than $600 billion by 2016.
“A number of merchants are surveying the first generation of solutions and have decided they need to and can build a better system,” Mott told the news site.
Companies in a wide variety of industries are working on their own payment systems, and very few are currently ready for market. In addition, there is very little infrastructure currently set up to handle this type of purchase. Further, the vast majority of smartphones do not have the embedded technology necessary to complete mobile transactions.
Image: Rochelle, just rochelle, via Flickr