Payments

11:23 AM
Connect Directly
Facebook
Twitter
Google+
RSS
E-Mail
50%
50%

How MasterCard Is Pushing Mobile Payments Ahead

MasterCard unveiled a number of new initiatives at Mobile World Congress this week that could help further mobile payments in the U.S. and abroad.

As every player in payments grapples with the speed of innovation in the market, MasterCard is making several strategic moves in the first half of this year to position itself as an innovator in mobile commerce. The company made a number of announcement this week at Mobile World Congress that will be “the de facto operating system for future commerce,” says Mario Shiliashki, MasterCard’s group head of emerging payments.

“These [initiatives] are about how we are now playing in a convergent world of digital and physical commerce. Mobile is changing the way people and merchants interact, so we have built new capabilities on to our platforms [to address these changes],” Shiliashki adds.

MasterPass In-App Payments - MasterCard announced yesterday that it is opening up its MasterPass online payments platform to retailers to use for mobile in-app purchases. The in-app payments capability will be made available to merchants in the second quarter of this year, and will enable quick checkouts for in-app purchases while supporting retailers’ loyalty and offers programs.

“We realize that more and more purchases are being made in mobile apps, and we’re seeing more mobile-optimized sites… MasterPass in-app payments will help drive e-commerce while enabling new in-store experiences. Consumers are already browsing products online through their mobile phones while in store locations. Now consumers will be able to get all that online info in the app,” Shiliashki shares.

[For More On Mobile Payments, Check Out: How Retailers Could Dominate the Mobile Payments Market]

MasterCard will also open up the MasterPass platform to developers to add new services on top of the platform. “We’re providing the platform for the developers to build the services on… and our strategy is to allow the merchant to choose how they want to integrate the platform and services, giving them the ability to let the customer choose how they want to pay,” Shiliashki says.

MasterPass In-App Payments at Mobile World Congress. Photo courtesy of MasterCard.
MasterPass In-App Payments at Mobile World Congress. Photo courtesy of MasterCard.

Shliashki acknowledges that the recent retailer data breaches has probably affected consumers’ trust in giving their payments information to retailers, but says that MasterCard is working to beef up security for mobile payments as well. “Consumers definitely view the retailers differently after the breaches. But the introduction of EMV [which MasterCard is pushing] will change the security paradigm for in-store payments. And we are working on a tokenization initiative with Visa and American Express that will help combat online fraud. There are a lot of retailers that have strong PCI compliance and still have massive amounts of data exposed. Tokenization will help with making that data unusable for the fraudsters,” Shiliashki explains.

C-SAM Acquisition - MasterCard is also upping its internal development capabilities for mobile products by acquiring C-SAM, which helped developed the ISIS wallet and a number of other mobile wallet initiatives around the world.

“We see the acquisition as a key way to speed up innovation. It will help other companies develop on top of what we’ve built. The C-SAM team has a good set of engineers focused on mobile platforms, and they will be working closely with our MasterPass team,” Shiliashki shares.

Acquiring a company with that kind of engineering talent will give MasterCard an advantage in a space where such talent can be difficult to find and recruit, he notes. “We have been lucky to have such a great brand, but everyone [in this market] is having a tough time to get the right talent. Getting on the front-edge of innovation will help us be attractive though,” Shiliashki adds.

Mobile Payments Collaboration - Mastercard will be joining forces with the three leading telecom providers in Germany - Deutsche Telekom, Telefonica Deutschland and Vodafone - to create a new mobile payments platform. The three telco’s represent around 85% of the mobile market in Germany, and with the new platform, issuers will be able to integrate with mobile payments applications with all three of the issuers via a MasterCard subsidiary called Trevica. This arrangement will cut a lot of the complexity in a traditional mobile payments environment where all the issuers need to connect individually with each of the mobile network operators, Shiliashki explains.

“This will accelerate mobile payments, as in the past you had to have each bank connected to each telco to [gain mass penetration]. We’re hoping to prove this model in Germany and then export it elsewhere,” Shiliashki says.

Foreign Transaction Decline Rates - In an effort to reduce decline rates for card-based transactions made by customers who are traveling, MasterCard is teaming up with Syniverse, the international switch behind telcos’ roaming partnerships. The two companies have developed a new geo-location technology that will be able to provide issuers with data on where the customer’s mobile device is when they make a transaction abroad.

“We pair the transaction data with the phone location and send that to the issuer for acceptance or decline. The issuer could then potentially ping the customer for added assurance that it is the customer making the transaction. Hopefully this will help reduce decline rates, as those declined transactions are lost to us and the bank,” Shialsihki point sout.

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Threaded  |  Newest First  |  Oldest First
KBurger
50%
50%
KBurger,
User Rank: Author
2/25/2014 | 6:59:44 PM
re: How MasterCard Is Pushing Mobile Payments Ahead
It seems like a lot of these moves are going to have traction first in non-US markets, altho I guess some of them could be applicable in any market. But overall it makes me wonder (again) about adoption of mobile payments capabilities in the US. And also (again) about where banks are going to fit into these developments.
bob_graham
50%
50%
bob_graham,
User Rank: Apprentice
2/26/2014 | 5:16:35 AM
re: How MasterCard Is Pushing Mobile Payments Ahead
I agree with adoption in Europe first as the US market is still behind. I think it is a step in the right direction for providing a multi card wallet that stores data in one secure place. So this helps simply the consumer side transaction, addresses security concerns and should make it easier for merchants.
bob_graham
50%
50%
bob_graham,
User Rank: Apprentice
2/26/2014 | 5:16:35 AM
re: How MasterCard Is Pushing Mobile Payments Ahead
I agree with adoption in Europe first as the US market is still behind. I think it is a step in the right direction for providing a multi card wallet that stores data in one secure place. So this helps simply the consumer side transaction, addresses security concerns and should make it easier for merchants.
KBurger
50%
50%
KBurger,
User Rank: Author
2/26/2014 | 6:55:17 PM
re: How MasterCard Is Pushing Mobile Payments Ahead
Let's hope the US banks (& other players) will be smart enough to study how this plays out in other markets and then are able to adopt best practices and potentially leapfrog the more established players. It would be a waste to simply assume, "it's different here."
Jonathan_Camhi
50%
50%
Jonathan_Camhi,
User Rank: Author
2/26/2014 | 8:37:22 PM
re: How MasterCard Is Pushing Mobile Payments Ahead
Well the MasterPass in-app payments could have a big impact in the U.S. right away I think. Giving the retailers the ability to provide mobile payments in their own apps could be an interesting starting point for spreading awareness and adoption of mobile payments.
Eyad Hasan
50%
50%
Eyad Hasan,
User Rank: Apprentice
2/27/2014 | 1:03:05 PM
re: How MasterCard Is Pushing Mobile Payments Ahead
The value of mobile based businesses will start showing its effect and influence in few years. The ecosystem is still under development following try and error approach and seeking to establish a base. Institutions that are contributing into this model will be the leaders in the market.
What MasterCard is doing in this direction will change the face of MasterCard and will underline and boost its future. Good Luck
Eyad Hasan
50%
50%
Eyad Hasan,
User Rank: Apprentice
2/27/2014 | 1:03:05 PM
re: How MasterCard Is Pushing Mobile Payments Ahead
The value of mobile based businesses will start showing its effect and influence in few years. The ecosystem is still under development following try and error approach and seeking to establish a base. Institutions that are contributing into this model will be the leaders in the market.
What MasterCard is doing in this direction will change the face of MasterCard and will underline and boost its future. Good Luck
Byurcan
50%
50%
Byurcan,
User Rank: Author
2/27/2014 | 1:49:26 PM
re: How MasterCard Is Pushing Mobile Payments Ahead
I agree, once the payments ecosystem evolves enough to make mobile payments convenient and widespread, we will see a great shift.
Nathan Golia
50%
50%
Nathan Golia,
User Rank: Author
2/27/2014 | 9:50:18 PM
re: How MasterCard Is Pushing Mobile Payments Ahead
Only a limited number of large brands currently accept mobile payments Gă÷ Starbucks is the most notable. I wonder if MasterCard can be successful in encouraging popular brands to incorporate mobile payments tech into their stores and get people overall more comfortable with it.
Register for Bank Systems & Technology Newsletters
White Papers
Current Issue
Bank Systems & Technology Dec. 2, 2014
BS&T's 2014 Elite 8 executives are leading their banks to success, whether it involves leveraging the cloud, modernizing core systems, or transforming into digital enterprises.
Slideshows
Video
Bank Systems & Technology Radio
Archived Audio Interviews
Join Bank Systems & Technology Associate Editor Bryan Yurcan, and guests Karen Massey and Jerry Silva from IDC Financial Insights, for a conversation about the firm's 11th annual FinTech rankings.