Inside MasterCard’s C-SAM Acquisition

MasterCard today took a strong move to push out mobile-wallet technology faster globally, including its own MasterPass digital service, with the announced planned acquisition of long-time partner C-SAM, whose platform supports not just payments but also customer-specific offers, loyalty incentives, banking, bill-pay options and nonfinancial transactions.

Announced at the Mobile World Congress in Barcelona, the planned acquisition draws upon a global strategic partnership the companies began in December 2012. MasterCard had been was a minority shareholder in C-SAM. Terms of the agreement were not disclosed.

C-SAM has powered commercial mobile-payment services in various countries, including India, Japan, Mexico, Singapore, the U.S. and Vietnam. It’s on-device application and back-end infrastructure will help in development efforts to enable consumers to use MasterPass both in stores and online across various mobile technologies, including Near Field Communication, QR/bar codes and remote checkout, the companies noted.

In a podcast interview with Market Platform Dynamics CEO Karen Webster, Munk Ki Woo, MasterCard executive vice president, noted that its work with C-SAM over the past two years has provided it with valuable insights into the company’s potential.

(jump to: 1:30) “We think that C-SAM is a world leader in mobile-commerce platforms, and we are extremely proud to be the new owner of this platform and all of the talented employees of the company,” he said.

C-SAM launched a digital-wallet solution in December that is compatible with MasterPass. Earlier, in August, the two companies worked together, and with DNP, to launch of a white-label NFC mobile-wallet service in Japan. And in July, C-SAM hired Kurt Weiss, previously the director of digital networks and mobile for Citigroup, and Conrad Sheehan, who founded electronic payment companymPayy Inc., to its team.

In a separate announced today at the same conference, MasterCard announced MasterPass in-app payments. This will enable consumers to make secure device-based payments within a mobile application, thus eliminating the need to store payment card credentials across numerous mobile apps, the company said.

Woo noted that one of the things about MasterPass is that it, like C-SAM, can support NFC, QR codes and other mobile platforms, as well as solutions across diverse customer types. “We have always said we are technology-agnostic,” he said. “When you look at their existing customers, they provide solutions to financial institutions, of course, but they also provide solutions to mobile operators, to retailers and even to other verticals.”

In essence, what MasterCard wants to do is to take advantage of the strengths of C-SAM’s platform and better serve all of the card brand’s stakeholders.

Last week, MPO’s Webster also spoke with MasterCard exec James Anderson about the company’s announced support for HCE, which emulates NFC contactless payments on Android devices. Click here to listen.

To learn more about MasterCard’s acquisition of C-SAM and Woo’s views on where cloud-based solutions fit into MasterCard’s strategy, listen to the full podcast by clicking below.