New Electronic Methods to Accept Credit Card Payment Processing

Merchants may have even more electronic methods to accept credit card payment processing in the future, thanks to a new smartphone payment system currently in development.

Three cell phone companies--Verizon, T-Mobile, and AT&T--are working together to build a payment solution that uses smartphone technology rather than a credit card with a magnetic strip. As shown in the picture above, smartphone owners would simply swipe their phones over a special reader.

The transaction would take place instantly, and the funds would be processed through Discover. The new payment system will be a challenge for Visa and MasterCard, as fewer consumers might carry their credit cards as a result.

Merchants, on the other hand, will definitely come out ahead if they participate in the smartphone payment system. No interchange fees are associated with smartphone payments, which will result in incredible savings.