There is news today of a joint venture formed by Verizon, AT&T, and T-Mobile to create a smartphone payment system, that would directly compete with credit card companies like Visa and Mastercard. The new venture would allow customers to purchase merchandise at participating retailers, simply by waving their smartphones. If this succeeds, it could cause some major problems for traditional credit card companies.

As to how they plan on recruiting retailers to participate in this new idea, they will most likely have fees that are considerably lower than current credit card fees. Credit card companies charge anywhere between 1-3% of every purchase to the retailer. If this new service charged lower fees, there is no reason to believe that any retailer would not be willing to implement this new service. Currently there are over $40 billion in fees collected each year for credit card purchases. If this new smartphone credit system even put a dent in that sum, Verizon, AT&T and T-Mobile should see a large increase in revenues.

The joint-venture gives AT&T and Verizon equal shares, while T-Mobile will not hold quite as many. This is simply because they do not have as large of a customer base. There is no word on when this new service will be launched.