MasterCard’s Digital Wallet Reaches Next Stage of Evolution with MasterPass
By D.J. Murphy, Editor-in-Chief, CardNotPresent.com
At the recent Mobile World Congress summit in Barcelona, MasterCard unveiled the next generation of its digital wallet. The company has rebranded its PayPass Wallet Services as MasterPass and enhanced the service to give merchants a flexible way to offer the omnichannel shopping experience they want to deliver to consumers, according to Ed Olebe, group head of MasterPass Services for MasterCard.
Olebe calls MasterPass an evolution of PayPass Wallet that saw the service morph from a wallet enabling e-commerce or in-store checkout to a service that looks at digital commerce “more holistically.” He notes a dichotomy that emerged between MasterCard’s merchant partners and issuer partners that were leveraging PayPass Wallet. Issuers were taking advantage of a range of options from a full, turnkey solution to an API enabling full customization that helped them offer their own digital wallet. For MasterCard’s merchant partners, however, it was a different story.
“On the merchant side really we were just enabling two different kinds of checkout: traditional e-commerce checkout with a checkout button and in-store, at the register, NFC contactless checkout,” Olebe explains.
MasterCard’s goal was to expand the suite of digital services they could offer their merchants who Olebe says were giving the card network a master’s-level education in omnichannel retailing. Merchants were telling them how they wanted to interact with consumers and MasterCard realized it could take the PayPass Wallet approach it had taken with issuers and apply it in the retail environment. Merchants who were offering mobile payments mostly through single native apps could leverage a new suite of services to reach consumers in all the ways they were saying they wanted to.
“We decided we really needed to take that same approach that was so popular with issuers—a services-based approach with a range of options—and apply that logic to the merchants side,” Olebe says. “That’s really what MasterPass has become: a comprehensive set of services for the merchant side.”
So, PayPass Wallet became MasterPass and, Olebe notes, merchants can leverage the platform to offer their products through many channels in many ways. The digital service enables consumers use NFC, QR codes, tags or mobile devices to make purchases online and in brick-and-mortar stores.
“We saw lots of situations where people wanted to initiate a purchase online and pick up in store; pre-order from a car or the train, pick up in the store; or scan a barcode or QR code in the aisle and have it shipped home,” Olebe says. “All those different combinations of where you make the purchase, where you physically are and where the goods end up. We wanted to facilitate those things for merchants. We realized we had to present them a range of options—not just two—to be able to effect that. That’s the new part of the actual technology and the driver behind this evolution from PayPass Wallet to MasterPass.”
Offering a range of options to merchant partners is vital in this omnichannel retail environment. Olebe says MasterCard now understands that merchants are trying to create unique shopping experiences and that different merchants will solve that challenge in very different ways. Since equally successful solutions can take various shapes, merchants can’t be pigeonholed into an inflexible service.
“Maybe we were slow to realize it, but very different decisions can be made by very smart people,” he explains. “With the merchants trying to create differentiated shopping experiences, they’re going to arrive at different technology investments and different ideas about how consumer flow should work—both online and in person. Rather than trying to provide a solution that requires a merchant to change to fit our mold, we should be providing a service that is easy for them to plug in to the way they want to operate their shopping experience.”
Olebe says MasterPass is easy for merchants to implement. They can work with the gateways, acquirers and processors they currently use and there are no incremental fees associated with transactions using MasterPass. And, eventually, the company says, it will enable EMV transactions online and in stores.
“This is about establishing a complete digital infrastructure and our vision will be realized when we can have EMV-like capability for both online and in-person payments, which we think will reduce the cost of payments overall by reducing fraud,” Olebe says. “We’re purposely trying to put in these foundational elements to enable that to occur.”
MasterPass will roll out initially in Canada and Australia by the end of this month. This summer, the service will launch in the U.S. and U.K. MasterCard also said that MasterPass will roll out in Belgium, Brazil, China, France, Italy, Netherlands, Singapore, Spain and Sweden by the end of the year.