Mastercard has unveiled its bid to dominate the mobile
payments market with a 'virtual wallet' allowing customers to
keep personal payment details in their phone and avoid
checkouts by scanning bar codes in-store to pay.
Financial services companies like the U.S. credit-card
company as well as technology names Google and eBay'a PayPal
are looking for ways to capitalise on the prevalence of
consumers' sophisticated phones by providing programs that
house credit and debit cards, coupons and store loyalty
program details virtually.
Mastercard said its MasterPass service, effectively an app,
would let customers pay for their goods without approaching a
cashier by instead scanning a bar code and creating a digital
receipt on their phone or tablet that can be shown as they
exit the store.
It can also be used for easier online payments, allowing
customers a "one click" way to pay without the hassle of
having to input their credit or debit card details each time.
It comes almost a year after MasterCard's first foray into
the mobile payments market with PayPass, which let customers
pay at store tills by simply tapping their cards against a
The U.S.-based credit card company said the MasterPass system
would be rolled out in Australia and Canada by the end of
March. The United States will follow later in the spring,
ahead of the UK in the summer.
Participating retailers include Argos, Boots and American
Airlines, while banks which have signed up include Spain's
BBVA and Santander, Citigroup in the United States, Italy's
Intesa Sanpaolo and Sweden's Swedbank.
Ed McLaughlin, chief emerging payments officer at MasterCard,
said banks would pay to use the technology, but would not
give any detail on what the charges would be. Banks will also
be able to use a "private label" version that can wrap their
own cards into the MasterPass virtual wallets.
McLaughlin would not give details on MasterCard's usage
targets for MasterPass, but said it was his company's "big
play" for the next generation of payments technology.
Last month MasterCard posted fourth-quarter results that
topped Wall Street estimates as more people chose card
payments over cash, but it warned that global economic woes
could slow revenue growth in 2013.
Both it and larger rival Visa Inc are working to spread card
payments in parts of the world dominated by cash
transactions. Mastercard is now focusing on tie-ups with
banks in Africa and Brazil, where mobile and card payments
are on the rise. It has also linked up with TIM, the
second-largest mobile network operator in Brazil, to launch a
mobile money program for its subscribers.
But MasterCard has its work cut. While the area of mobile
payments is widely seen as the next big money-spinner,
companies are so far struggling to make money from them.
There is also a raft of different products coming to market.
Visa Inc will soon be rolling out its own digital wallet
service, V.me, while last week PayPal launched a new European
version of its mobile payments service that merchants can run
on Apple Inc iPhones and Android-based smartphones.
Meanwhile tech start-up Square, headed by Twitter co-founder
Jack Dorsey, has attracted thousands of small merchants in
recent years by offering a free card reader that attaches to
smartphones and handles payments for a flat fee.