The use of NFC to make mobile payments has been on the horizon for the past couple of years, but each time that we appear to be at the crux of finally achieving it, for one reason or another we find ourselves bogged down. However, MasterCard has finally taken the giant leap necessary to attain this goal with the announcement of its MasterPass system at MWC 2013. While MasterCard isn’t the first company in this space, with Google Wallet being out for almost two years now, with little progress in terms of adoption, and ISIS a joint-venture between major carriers in the USA including Verizon, T-Mobile and AT&T currently undergoing testing. MasterPass might finally be the one that develops an effective mobile payment system that gains widespread adoption.
MasterPass won’t simply be a system used to make mobile payments using technology such as NFC, but will address all forms of digital transactions whether it’s in stores, online or via your phone. The new standard is heralded by the ever-increasing connectivity of the digital world compared to the physical, therefore allowing them to unify all the payment options currently available into one system. As MasterCard’s chief emerging payments officer Ed McLaughlin has stated, “There’s no e-commerce or m-commerce, there’s just commerce.”
For consumers, MasterPass will offer a method of storing your credit card information, address book and other details in a secure cloud network. It also functions as a digital wallet, like Google Wallet, allowing users to make payment by scanning their phones, and it will support other brand credit cards, not just MasterCard ones, which will help drive adoption of this system. When it comes to online purchases, it will allow for a simple quick checkout method if the retailer is also participating in the system, similar to that of PayPal.
For merchants, it will provide a consistent method of commercial transactions regardless of geographical location. It will also help push more retailers to adopt the use of new technologies such as NFC scanners that is used in PayPass and can be used on select smartphones that support the system. MasterCard is also experimenting with the use of QR codes, for those that are unable to use NFC to make mobile payments.
MasterCard has already signed the support of multiple large financial institutions, including Citi, Commonwealth Bank and numerous other technology and merchants. Consumers in Australia and Canada will be able to sign up for the service in March, with the US and UK expected to follow in spring and summer respectively, before it’s released globally.