Sprint Nextel Corp. plans to start a service this year that will allow customers to make purchases with their mobile phones, ahead of a similar initiative from rivals Verizon Wireless, AT&T Inc. and T-Mobile USA.
Sprint is working with payments networks and handset makers on near-field communication technology, which can allow people with smartphones to make purchases by tapping them on or waving them in front of electronic readers in stores, said Kevin McGinnis, vice president of product platforms.
The effort may help Sprint attract new customers and compel existing ones to upgrade to payment-enabled handsets. The competing joint venture, Isis, said in November that its network may not be available to consumers until 2012.
"We intend to make this an open solution where consumers can use their phone in a variety of physical locations," McGinnis said. "Because we're allowing other brands and other institutions to participate, they can also tell their consumers that this is available on Sprint."
Rather than take a percentage of each transaction, as Isis plans, Sprint could share in revenue from sales of coupons sent to its customers' handsets or targeted advertising, McGinnis said.
Users' purchases would be billed through their regular credit card statements.
"That's considered the Holy Grail in preventing bill shock," said Richard Crone, the president of Crone Consulting LLC in San Carlos, Calif. "All the carriers will have to work on merchant acceptance, which today is very low."
