The mobile payments race heated up this morning when MasterCard announced that it has signed an agreement with mobile banking provider mFoundry. MasterCard also announced that it has made an investment in the Larkspur, Calif.-based company.
The partnership will incorporate mFoundry's mobile financial services platform with MasterCard's PayPass, which uses near-field communication (NFC) technology to enable point-of-sale payments by tapping a mobile phone on a merchant's PayPass-enabled checkout terminal. For the 560 banks and credit unions already using mFoundry solutions, this new agreement means that they will be able to offer mobile payments to their customers as part as their mobile banking solution.
Rick Oglesby, a senior analyst at Aite Group, says that this type of partnership is also a logical step toward helping banks take their own digital wallet solutions to market -- an area in which they have been lagging behind a little. At the same time, he adds, third-party vendors will also continue to come out with digital wallet products. "There's room in the market for both approaches to work," he says. "Banks will be leveraging their current customer bases to launch their digital wallet products, and companies such as Google will be leveraging their customer bases to do the same." Overall, he notes, the strength of these different customer relationships will play a part in determining the success of the various solutions.
James Anderson, MasterCard's senior vice president of mobile, discussed the announcement on the company's The Heart of Commerce Blog, saying, "Simply put -- both companies want to bring mobile payments to more consumers." In a video posted on the blog, he also discussed the new partnership with Drew Sievers, co-founder and CEO of mFoundry. You can watch the video below: