• Business 2.0, Monday, December 4, 2006 11 AM

The future of cell phones is particularly fun to think about: Your phone will soon be your real-world remote control, capable of playing long and short-form video, video games, music, and now, financial transactions.

You'd think phone carriers have been dreaming of the day when they can take a slice of transactions made with a cell phone. Forget the credit card. Swipe the phone, and that sweater is yours. In Japan and Europe, this is already a reality. Consumers have been buying stuff with their handsets for about a year.

But in the U.S., we're going to have to wait for that kind of functionality. Why? Because banks and carriers are at an impasse about what kind of cut the carriers should receive. Indeed, given the myriad problems cell carriers are having with partners from different business areas, it seems Ma Bell and co. have become notoriously stubborn and greedy negotiators.

"This is not going to happen as quickly as we thought," says Jonathan Collins, an ABI senior analyst. The problem is about rivalry and profit-sharing. Somehow, the carriers also consider banks to be their competitors. Obviously, the carriers want a cut, but banks say this would artificially drive up prices.

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