Many companies are working on ways to allow consumers to begin dealing with their credit card debt using their mobile phones instead of swiping their cards in the traditional way, but there may be some way to go when it comes to standardizing this type of purchase.
Mobile wallet purchasing platforms are expected to be the next big thing in the credit card industry, but because there are so many companies developing their own versions of the technology, it may be some time before a uniform system exists, according to a report from San Francisco, California, television station KGO. For this reason, there are factions forming for two of the largest competitors in the field, and each will likely have its own stable of partner retailers.
“You have Google proposing, ‘This is how we’d like to do it,'” Derek Kerton, the principal analyst for the Kerton Group and chair of the Telecom Council Silicon Valley, told the news station. “But you have companies like the carriers in the United States, forming an association called ISIS, saying, ‘No, no, don’t work with Google, work with ISIS. This is the payment consortium that’s going to bring this all together.'”
However, both will likely try to incentivize business participation in their programs by giving the companies a large amount of information about the people using mobile wallets, the report said. For instance, users might be able to link their store loyalty, credit card rewards, social networking and local couponing accounts to their mobile wallets, which would give retailers more detailed information about customer spending, saving and sharing habits. That, in turn, could be used to create more direct marketing.
Studies have shown that consumers who use swipeless credit card purchasing systems are likely to spend more money than they would with a regular card, and considerably more than if they used cash. For this reason, it may be a good idea for those who have sought debt relief in the past to carefully consider the benefits of such a program, and, if possible, try to restrict the use of these accounts to make everyday purchases. Using a credit card often can lead to balances that quickly grow quite sizable and can therefore be difficult to get back under control again.