MasterCard made plenty of news on Monday at Mobile World Congress. It announced the launch of MasterPass — its omni-channel digital wallet that will support QR codes, tags — and the NFC v.2 of PayPass, which was released last year. It will also extend MasterCard’s cloud-based wallet capabilities to the physical point of sale. One more arrow in the worldwide cloud-based wallets quiver! I read this as MasterCard’s nod to the growing realization that NFC is no longer the sure-bet mobile payments method and that enabling mobile payments anyway that technology will deliver it is now digital wallet table stakes. Virtual fist bump to the MasterCard team!
MasterPass is also now supported by MasterCard’s “connected” wallet platform, which I read as further proof of its desire to use its platform to stimulate, distribute and aggregate mobile payments innovation to its various stakeholders – merchants, FIs and third parties. MasterPass is MasterCard’s second toe in the platform as a service offer waters — loyalty and its loyalty offers platform announced last year, was its first.
Both announcements represent big moves forward in MasterCard’s digital wallet strategy. MasterCard, like Visa, has decided that getting a digital wallet out into the ether and populating it is the ticket, since that is the best way to persuade merchants that you have an online consumer base and something of extra value to offer them. Its next two chess moves are to (1) give consumers a reason to download its wallet since acceptance is still relatively thin right now, and (2) incent its third party channels to distribute its wallet and/or wallet technology versus other digital wallet alternatives.
What hasn’t been covered as much is MasterCard’s social media research findings — which were released today, too. MasterCard did something kind of clever: It tracked 85,000 social media comments across 43 markets and over six months across a variety of online resources – Twitter, Facebook, Blogs and other forums – to get a sense of consumer sentiment about mobile payments. Mobile payments is a topic of conversation, for sure, in the industry, but this effort was designed to see just how much the “rank and file” consumer really cares about it outside of our payments industry bubble.
There were a couple of interesting takeaways.
The big mobile skeptics? You might be surprised. It isn’t the US where prior reports have consumers all heebie-jeebie over mobile phones and security. It’s right in the heart of NFC mobile technology land: namely Europe (France, UK) and Canada. The skepticism there seems to be rooted in a general concern over acceptance and the view that worldwide acceptance like the plastic card attained is a bit of a pipedream. I think that is interesting given that their point of reference, at least so far, is NFC technology. (Do you think they have been reading the EMEA edition of PYMNTS.com??!!) In the U.S., which has a far more upbeat view of mobile payments, there is momentum building around mobile apps like Starbucks and Dunkins and LevelUp, familiarity with Square and its category competitors that now power everything from Girl Scout cookie sales to Joe the Plumber house calls, and a shift from using computers to shop online, to their smartphones and tablets – which most consumers describe as “mobile payments.” These apps and use cases have created the feeling that mobile payments are useful, secure and convenient, even if they aren’t ubiquitous. Consumers in the U.S. have been exposed to the power of the mobile phone and payments and commerce across a variety of environments and technologies and are generally enthusiastic about what they see and have used.
The other finding that I thought was interesting is that the most skeptical mobile phone users were the early adopters rather than Joe Six Packs who overall seemed more psyched about the potential for added convenience, speed and innovation. In prepping for The Innovation Project (Are you on the list??), I have been re-reading the books written by our v.cool thought leaders, including The Lean Startup by Eric Ries. Ries’ proposition is that early adopters love innovation and will tradeoff lots of stuff including reliability and compatibility for a new experience. All you early adopters, raise your hand if you remember v.1 of the iPhone? Remember those tradeoffs? According to Ries, the toughest customers are those more mainstream guys and gals who come to new things with high expectations since they seem pretty happy with what they have now, and need the “new thing” to be demonstrably better in order to make the switch.
According to the MasterCard research, it is the exact opposite when it comes to mobile payments. It is the early adopters who are the party poopers and the mainstream guys and gals who seem genuinely excited by the prospect of using their mobile phones to shop and pay in stores. The reasons for the early adopter skepticism is a concern over acceptance — basically not being able to use their phones all the places they want to. In fact, the problem is the early adopters get all psyched at first and download and populate wallets only to get turned off by the lack of acceptance. Maybe the mainstream customers haven’t thought the acceptance part all the way through or maybe they don’t care so long as they can use their phones at the places they want to, which may not necessarily be all of the places they shop today. Then again, maybe the early adopters are too hung up on making a total switch from plastic card to mobile phone as a condition of being wildly enthusiastic, which can only mean that they will be grumpy for a long time to come.
The study is an interesting data point since it only underscores that there is a worldwide consumer conversation about the power and the potential of mobile payments. From Dallas to Dubai, the chatter is consistent — consumers are fascinated with the possibility of using these powerful devices to discover new and efficient ways to buy and pay. Absent these conversations? Anything at all about what technology was going to power the experience – that’s the stuff that they will leave to all of us to duke out and tell them about later.