Cash, Credit, or Cell?

"Hey can you cover me I left my charger at work?"

This is how you will sucker your friend in to paying for your night out in a year or two.

Confused?

Yeah... you, Master Card, Visa, and American Express too.


In just a few short months consumers will have the option to pay with cash, credit card, or their smart phone.

That's right soon your smart phone will be just like a credit card except better; it won't be a credit card.

Who Is Behind This New Payment Method?

More then several players are going to be directly offering a cell phone payment method.

Below is a quick list of the bigger companies creating an alternative credit method for your smart phone.

Isis

AT&T, Verizon, and T-Mobile are all joining forces to form a company or entity or whatever they are call such a partnership. This new transaction processing company will be called Isis.

Google and the Android Operating System

Google is developing a system that will integrate with their Android operating system. All a phone will need is the embedded chip.

New Start-Ups 

There are several new companies that have already formed that are going to offer solutions for both consumers and merchants as an alternative to paying with the old credit card.

Why the Push to Create a New Payment Method and Credit Card Alternative?

Mobile Networks

This is the obvious answer. All the big data networks such as AT&T, Verizon, and T-Mobile will expand their offered services in a big way. The electronic transaction solution business is one hell of an extra business to get in to. They will get a cut of every transaction just like the credit card companies do now.

Consumer Choice

Then of course there is the consumer demand for an alternative to credit cads. there is an obvious benefit to being able to pay with your smart phone in addition to the other two choices that we already have. though this is an obvious motive for coming up with another merchant transaction solution and alternative to credit cards it is not even close to the main driver of this new industry.

Merchant Incentive - A Cheaper Better and Smarter Alternative

Merchants are going to welcome this thing with open arms. Merchants have a real love hate relationship with credit cards. The problem that merchants have with the existing credit card transaction solutions is the price they are charged by the credit card companies. It really puts a dent into the margins.

Also the credit card companies have been increasing rates on the merchants to make up losses that the banks have incurred during the credit crunch and massive waves of loan defaults.

To top it off the credit card companies have made it a breach of contract for merchants to say anything about the expense to consumers.

In fact many people have no idea how credit card companies make money. It's not the interest we all pay.

Merchants will be able to cut the transaction expense in half. This means bigger gains in margin. This thing will be huge for merchants.

Credit Card Companies are in Trouble

The one thing that is crystal clear amidst all this new possibility and choice that consumers, networks, and merchants will have in the very near future is that credit card companies are not going to fair well.

Sure there is going be a place for credit cards. Trust me when I tell you that credit cards are not going anywhere. I am actually surprised that the bigger credit cad companies are not more involved with this new movement but the again I guess these phone networks have a pretty solid infrastructure already in place.

My next post is going to be on what this will mean for consumers and merchants as well as the data networks. The positive impact and benefits of ths shift is going to be a lot bigger then most people would think and I really want to paint a vivid picture for everyone.

So check back soon!


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Verizon vs AT&T - Comparing iPad Data Plan Financial Value

In my last post I reported that Verizon and AT&T will soon be selling the iPad in all retail locations. The iPad will be available through these two companies before the month of October is out. I believe the exact date is October 28th.

I made no effort to hide my personal feelings about this notion. I was very transparent about my excitement and anticipation for the new Verizon option. They will now add competition to AT&T's data plan solution for iPad owners and users.


I want to prove my point. I wanted to do a post comparing AT&T and Verizon iPad data plans.


The comparisons I have below are simple. I took the lowest cost lowest value plan for each company and calculated the Dollar per GB ratio for each plan. I did the exact same thing for the highest cost highest value plan of each company. Below are the results. I don't want to say I told you so but I told you so.

AT&T

• Best value = $12.50 per GB
• Worst Value = $60.00 per GB
• Now that is the AT&T I know and love.
• Great job guys way to bend over the struggling American consumer. What a service.

Verizon

• Best Value = $1.25 per GB that is literally 1/10 of the cost of AT&T.
• Worst Value = $20.00 per GB which is a 1/3 of the cost of AT&T.

So you can spend 1000% - 300% more for a AT&T data plan or you can take that money and pay for your iPad data plan with Verizon as well as 3 - 10 plans for your friends depending on your social life.


Decisions, decisions.

BUY Verizon

iPad - Soon Sold by Verizon and AT&T Retail Locations

Apple has announced that they are planning to allow both Verizon and AT&T to sell the iPad out of their retail locations.

The iPad will be available for sale at all Verizon and AT&T locations starting at the end of October before Halloween.


This coolest part about this deal is that Verizon is involved. Verizon will be able to offer some much needed competition to AT&T data plans.

AT&T has not exactly been value orientated when it comes to developing data plan options for the iPad.

Any how, the bottom line is that this finance blogger is excited to here the good news that Verizon is becoming apart of the Apple wireless product data plan options. At least in some shape or form.


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