AT&T Inc. and Verizon Wireless, thebiggest U.S. mobile carriers, hired former General Electric Co.executive Michael J. Abbott to head a venture that would letpeople make purchases with their mobile phones, a person withdirect knowledge of the matter said.

Abbott, previously chief marketing officer for GE’s U.S.retail consumer-finance business, will be announced as chiefexecutive officer of the new mobile payments company, which alsoincludes Deutsche Telekom AG unit T-Mobile USA as a partner,said the person, who asked not to be identified because theplans aren’t yet public. an announcement may come tomorrow.

The phone companies are working with Riverwoods, Illinois-based Discover Financial Services and Barclays Plc to letconsumers pay retailers with the contactless wave of asmartphone, potentially supplanting plastic credit and debitcards. that may pose a threat to Visa Inc., MasterCard Inc. andNew York-based American Express Co., the biggest card networks,which have been testing mobile payments worldwide.

The service is similar to those already available in Japan,the U.K. and Turkey. Transactions would be run throughDiscover’s network, currently the fourth-biggest by paymentsvolume behind Visa, purchase, New York-based MasterCard andAmerican Express. Barclays, based in London, may be the bankhelping to manage the accounts, people familiar with the planssaid in August.

Attempts to reach Abbott by e-mail and phone wereunsuccessful. Spokesmen for the telephone companies, Discoverand Barclays said they couldn’t comment. Verizon Wireless, basedin Basking Ridge, New Jersey, is a joint venture of VerizonCommunications Inc. and Vodafone Group Plc.

Abbott joined GE in 2002, according to a biographycirculated at a 2008 banking conference. he expanded issuance ofstore-brand cards that also carry the MasterCard, Visa, AmEx orDiscover logos and can be used elsewhere. Fairfield,Connecticut-based GE, the biggest U.S. private-label cardissuer, has portfolios including Wal-Mart Stores Inc. andDillard’s Inc.

He previously was senior vice president of card services atFleetBoston Financial, now owned by Bank of America Corp.

A consumer using the mobile service would be able to pay amerchant by holding a smartphone with an embedded radiomicrochip near a reader at checkout. the technology may allowpeople to forgo plastic cards and enable retailers to sendcustomers electronic receipts and rewards in real-time.

Merchants may want to help another network after fightingfor years to win lower transaction fees. Last month, Visa andMasterCard settled a U.S. antitrust lawsuit that said thecompanies’ contracts unfairly bar retailers from steeringcustomers to other brands. Merchants filed a 2005 antitrustlawsuit that is still pending and earlier this year persuadedCongress to approve caps on fees for debit transactions.

Visa and MasterCard handled $2.45 trillion, or 82 percent,of U.S. consumer spending on all-purpose cards last year,according to the Nilson Report, an industry newsletter. Thatdominance has helped fuel profit growth for both firms. Visa’sannual operating income has grown almost eightfold since fiscal2005 to $4.54 billion in the year ended Sept. 30. MasterCard’ssurged more than fivefold to $2.27 billion in 2009.

In August, people with knowledge of the plan said theproject was code-named Mercury and that the carriers wereconsidering pilots in Minneapolis, Salt Lake City, Atlanta andAustin, Texas.

Card networks and banks aren’t waiting for the U.S.carriers to offer payment-enabled devices. They’re working todevelop their own technology that works with mobile phones onthe market today, seeking a bridge until embedded chips arestandard.

Visa has introduced U.S. consumers to products that cantransform most smartphones, including Apple Inc.’s iPhone, intopayment devices able to store multiple card accounts in an e-wallet.

Bank of America, the biggest U.S. lender, started testingthe technology in September while JPMorgan Chase & Co., U.S.Bancorp and Wells Fargo & Co. are preparing similar pilots,according to Visa.

To contact the reporter on this story:Peter Eichenbaum in New York at

To contact the editor responsible for this story:David Scheer at