By Laura Noonan
LONDON Feb 25 Mastercard unveiled its
bid to dominate the mobile payments market on Monday 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
Inc's 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
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 sensor.
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
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
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.