Visa and MasterCard are introducing Internet-based technologies that will allow customers to pay using their mobiles.
The two technologies, announced separately yesterday, will take advantage of contactless near-field communication (NFC) technology, which allows customers to make purchases by tapping their phone to a store's card reader.
Both technologies tap a new feature in Google's Android operating system that allows card information to be stored remotely rather than on a secured part of the phone, with the retail or banking app able to retrieve what is needed to complete the transaction.
Visa said it will provide app developers with a complete service, with card information stored on Visa's servers, while MasterCard said it will publish technical details by the end of June to help companies use the new Android feature, known as host card emulation (HCE).
MasterCard said it has been testing the technology with two major banks, Capital One in the USA and Banco Sabadell in Europe.
"The use of HCE provides a very attractive way forward to launch an increased number of NFC-based offerings," said James Anderson, MasterCard's group head for emerging payments, in a statement.
Many Android phones have NFC capacity, and the remote storage capabilities come with the Kit Kat version of Android, which was released last autumn. Apple's iPhones lack NFC, but cases are available to enable that technology.
Visa said it will make tools available for app developers to incorporate payment capabilities. The customer can then use a smartphone instead of a plastic credit card at stores, transit systems and other places that accept contactless payments.
The hope is to encourage greater use of contactless payments, which experts say offer more security protection than plastic. The card number is stored in encrypted form and can be easily disabled remotely if a phone is lost or stolen.
Mobile systems also permit easier use of one-time card numbers, which will not work for additional transactions and are useless should a merchant's computers get hacked.
Sam Shrauger, Visa's senior vice president for digital services in developed markets, said having payment information on remote servers is cheaper and easier to operate than using the phone's hardware.
With hardware-based systems, he said, services need to make deals with wireless carriers and device makers. Although he did not cite examples, many US carriers had blocked or made it difficult to get Google's NFC-based Wallet app, for instance, as they were developing a competing system, Isis.
The announcements were made ahead of the Mobile World Congress wireless trade show, which takes place in Barcelona, Spain, next week.