By James Quinn
Debit and credit cards may become a thing of the past if a new trial involving Barclays and a host of US mobile phone companies bears fruit.
The British bank has reportedly teamed up with AT&T, Verizon and TMobile to test out technology that would allow US consumers to buy products and services simply by waving their phone at a reader.
The trials – involving smartphones such as Blackberries and iPhones – involve embedding a radio frequency identification (RFID) tag inside a phone to allow it to be linked to a customer’s bank account.
Shares in Visa and Mastercard – which have both tried and failed with similar schemes in the past but have a stranglehold on the US credit card market – were marked down as a result, falling 2.39pc and 2.98pc respectively.
It is understood that as part of the trials, Discover would process the payments via its existing network, while Barclays would help to manage the accounts themselves.
None of the companies involved in the venture have yet confirmed its existence. Barclays declined to comment. Were the trials to be successful, it could lead to a significant shift in the way money changes hands in the US, particularly in shops, restaurants and bars, where credit cards – not debit cards – tend to be the most popular form of payment.
Visa and Mastercard currently handle 82pc of US consumer spending on general purpore credit cards.