Mobile credit card options a major focal point for developers

Companies in a wide range of different industries appeared at a recent cellphone industry trade show, and seemingly all anyone in attendance could talk about was the coming wave of digital payments across a number of platforms.

There are a large number of companies that are working to develop systems that allow consumers to use their smartphones in conjunction with their credit cards in various ways, many of which are predicted to become widely used and have a major effect on the way consumers deal with cash in the future, according to a report from the merchant group the National Association of Convenience Stores Online. One of the more popular types of systems seen at the trade show was the mobile card reader, which can be plugged into a mobile device's headphone jack and used to swipe a credit card, making it easy for businesses to accept this type of payment quickly and easily.

Perhaps the most popular of these systems is the one offered by tech startup Square, which is gaining users among businesses large and small at a rapid rate, thanks to its ease of use and wide availability, the report said. However, a new competitor for the undisputed king of the mobile payment processing industry may be rising, as VeriFone Systems announced its new card reader, Sail, at the conference as well. Not unlike Square did in its early days, VeriFone is offering the mobile reader free to anyone who wishes to sign up for it, and charges merchants who use the system to accept card purchases a flat processing fee of 2.7 percent of the transaction's value.

Mobile wallets also a major goal

But no discussion of mobile credit card technology would be complete without the burgeoning digital wallet payment systems currently in development, including Google Wallet, which launched late last year, the report said. At the conference, MasterCard also announced that it would soon be releasing its own mobile wallet system, as did its larger competitor Visa, though the latter will likely be available farther down the road.

"The idea behind this is: How do we get more wallets and more innovation?" Ed Olebe, MasterCard's senior vice president of e-commerce development, told the site.

The problem with mobile wallet adoption right now is one of technology, the report said. First, there is a relatively small number of smartphones currently available that can actually make such a transaction. Mobile wallets rely on near-field communications technology, which only comes standard in a small handful of handsets right now. However, experts predict the next generation of smartphones will likely incorporate NFC equipment far more frequently. Currently, the only ones on the market work exclusively with Google Wallet.

However, many consumers have also expressed concern over the security of these systems, but experts say they're safer than traditional card use. Those worried about the state of their finances may also want to take the time to check their credit reports for any unfair markings.