Credit cards will be replaced with cell phones
TEXT OF INTERVIEW
Steve Chiotakis: Next time you pull into a gas station buy a new suit, you may just keep those credit or debit cards in your pocket or purse. Bloomberg news reports Visa and MasterCard are in talks with the nation’s two largest mobile phone companies, AT&T and Verizon, to get rid of plastic cards and make charging completely electronic. Rob Manning is author of Credit Card Nation, he’s with us live from Rochester, N.Y. Good morning, Rob.
Rob Manning: Ah, it’s a pleasure to be joining you.
Chiotakis: Kind of makes your book obsolete, doesn’t it? Haha! No more credit cards.
Manning: The world is changing very quickly, but it doesn’t mean there’s not credit cards, it just means the way in which we’re conducting our transactions.
Chiotakis: That’s right, no physical credit cards. But how would this actually work? Will this come out of our bank account or added to our bill?
Manning: Well I mean, partially depending on the recession, but clearly in two to three years, the marketplace is going to change radically.
Chiotakis: Is this good or bad?
Manning: Well, you know the real problem is for under-bank people or people with damaged credit, this could be a good option if they don’t have a traditional bank option. But the problem is, do we trust people getting involved in banking services that don’t have that experience? And essentially, what we’re talking about is whether banks are going to be lending AT&T money or a line of credit and give you a line of credit . . .
Chiotakis: When you say inexperienced, who’s not inexperienced enough?
Manning: Well what we’re looking at here is tremendous competition in cell phones, and they’re trying to fidn new financial services and new revenues. And in the fee-based economy model, this could be a way to nickel and dime and even dollar people to death with expensive overdraft-type loans.
Chiotakis: So take us through the process as you’re familiar with it. What would you do — you’d just pull out your cell phone while you’re, you know, checking out of the store?
Manning: Well, I mean, there’s going to be a variety of ways. You can have anything from visual connections with your computer, you can send it through bluetooth-type technology. It’s all going to depend on the functionality of your cell phone, which is going to change radically. Which raises questions: Will cell phones be lost leaders to enable them to conduct financial transactions, and that’s where the money is.
Chiotakis: You’re going to want to keep it charged, I’ll tell you that much. Cell phones. Rob Manning, author of the book Credit Card Nation. Thank you, sir.
Manning: My pleasure.
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