Major telecom firms Verizon Wireless, AT&T Inc. and T-Mobile USA have joined with Discover Financial Services and Barclays Plc and are preparing to announce a joint plan to offer mobile payments in the United States, according to reports by Reuters, Bloomberg, and other news outlets.

The partners have reportedly named to lead the venture Michael Abbott, formerly chief marketing officer at General Electric Co.'s GE Capital division.

Mobile payments could be a major step forward for the self-service industry, allowing consumers to make their own purchases with little assistance from sales staff. The impact on the kiosk industry is unclear, with mobile competing with such applications as flight check-in, DVD rental and wayfinding. However, mobile payments would presumably expand retail self-checkout.

The reported partnership sets up what could be a bruising battle for control of mobile payments. Under some scenarios, the bill for a mobile transaction would appear on the consumer's phone bill, bypassing dominant payment processors like MasterCard and Visa, and possibly the credit- and debit-card issuing banks. This could possibly shut out Visa and MasterCard, and reduce the need for cards.

This summer, the five reported partners joined to pilot a contactless smart phone payment system at stores in Atlanta and three other U.S. cities (“Visa, Discover and major banks begin testing mobile payments,” Sept. 17).

In a separate pilot this summer, Bank of America, U.S. Bank, Visa and Wells Fargo teamed on a smart phone payment project in New York City, with plans to complete the trial by the end of the year. Bill Gadja, Visa's head of global mobile products, told Reuters that "(W)e want to be commercially ready early in 2011" to let consumers use their cell phones to make purchases.

Any mobile payment system would possibly use a technology called near-field communications, or NFC, which allows the consumer to make a purchase by waving her smart phone near a merchant’s point-of-sale device. The phone must have an installed NFC chip or NFC-equipped sticker that can transmit radio waves with the consumer’s payment information to the POS device which can read the information.

One challenge for any mobile payments system would be to equip phones and POS devices with NFC equipment. By one estimate only about 140,000 payment terminals in the United States can accept mobile payments out of the 4 million to 5 million devices nationwide. The expectation is that NFC equipment will become standard for newer smart phones.

Mobile payments have become common in Japan and Korea where carriers and banks have partnered to build the capability among merchants and consumers. Such partnerships haven’t occurred in the United States, making the reported participation by Discover and Barclays a possible key to the new partnership.

Discover is the fourth largest payments processing network in the United States after MasterCard, Visa and American Express. Discover and AmEx, however, also issue cards; MasterCard and Visa don’t. AmEx ramped up recently its mobile strategy, hiring to lead its efforts former Sprint Nextel executive Dan Schulman.