MasterCard unveils its own digital wallet
MasterCard has today unveiled PayPass Wallet Services, its own take on the digital wallet.
Initially, it will pop up in the form of a payment icon at merchant websites. The wallet will allow users to store all of their cards, and MasterCard plans to distribute developer tools to allow other wallets to work with its network. The move is an attempt to broaden PayPass beyond contactless payments, and into something more ubiquitous.
MasterCard is just the latest to be lured in by the prospect that comes from managing consumers' multiple credit and debit card accounts. As such, it enters an already crowded field of global mobile wallet players attempting to stake their respective claims in a burgeoning field.
There are already competing efforts to put out a digital wallet by rivals Visa and American Express, the wireless carriers and PayPal. Interestingly, the move could be interpreted as counter to Google's own digital wallet, in which MasterCard is a key partner.
MasterCard is vowing to be open. Anybody can sign up for a PayPass account. Initially, banks participating in the initiative will alert their customers that the capability is available to them. But consumers can also sign up and enter their own credit cards, which include Visa and American Express.
"Our strategy isn't to go with a single wallet," said Ed Olebe, senior vice president of MasterCard's e-commerce product development. "Our strategy is a network of wallets that interconnect."
Unlike other, more ambitious attempts, which are trying to push smartphone tap-and-go payments, MasterCard will tiptoe into the mobile payment arena through online purchases on the phone.
PayPass will appear as a payment icon on regular and mobile websites, similar to Amazon's one-click button, which makes the act of purchasing goods and services on the phone a lot easier than filling out a bunch of information. After clicking on the icon, consumers need to enter the same password and user name that's associated with their bank accounts to complete the payment. That's a boon to smaller merchants looking for an easy way to drive online and mobile transactions.
"We're trying to enable differentiation and wallet competition, so consumers can get better products, without adding complexity to merchants and consumers without an additional checkout button," Olebe said.
American Airlines and Barnes & Noble have agreed to add MasterCard's PayPass icon to their sites for one-click purchasing. MasterCard is working to get other merchants on-board, as well.
MasterCard: still tight with Google
MasterCard has one key advantage in its network of PayPass payment terminals at locations such as pharmacies and petrol stations. Those terminals use a technology called near-field communications (NFC), which allows a credit card, keychain or smartphone with an NFC chip to transfer a payment over by simply waving it in front of the sensor.
The NFC-enabled network was one of the reasons why Google partnered with MasterCard on its own digital wallet offering. MasterCard figured prominently in Google's unveiling of the service a year ago.
But MasterCard's own digital wallet could eventually compete with Google Wallet, particularly if the company takes the next step and moves into smartphone payments through its own app or partnership with a handset vendor.
Olebe, however, dismissed the notion that today's announcement indicated any strain with Google.
"We're still thrilled with the partnership with Google," he said. "Google isn't our one answer; there are other things we can do."
Google Wallet has been criticised as being too inaccessible. The service is only available on Sprint phones or unlocked phones, and only devices with NFC. It's also only in a few cities.
"There are some for which Google isn't for them," Olebe said.
The Wallet product is also unavailable in markets outside the US, meaning that Australians miss out altogether. Google's Wallet product has been spotted in Sydney at a Google developer day, however, and the Commonwealth Bank's chief marketing officer, Andy Lark, has expressed a desire to bring Google into the Kaching NFC payments platform.
Vows of openness
MasterCard plans to push this to as many partners as possible. The company plans to distribute its application programming interface (API) to partners looking to plug their own wallet in to the network. That means banks and merchants looking to take advantage of the PayPass capabilities can easily do so.
Those capabilities include checkout, fraud detection and authentication services, as well as the ability to handle a purchase made wherever PayPass is already accepted.
MasterCard plans to make its PayPass Wallet Services available to its partners in the third quarter in the US, Canada, Australia and the UK, and expand to other countries afterwards.
After the initial roll-out, the company plans to add other services, including a quick view of account information during purchase, spending controls and real-time alerts, delivery of targeted offers, coupons and other loyalty programs — something that other companies, such as Google, are trying to deliver.
Olebe acknowledged that it's unlikely that Google Wallet or even Isis, the US carrier's mobile-payment joint venture, would try to work with MasterCard, but he said that the option is out there.
"We know there's a lot of activity and innovation," he said. "We don't want to stop it."
Luke Hopewell also contributed to this report.