“Consumer expectations are changing, and they’re getting higher. Consumers don’t think about technology as technology; it just is,” said mastercard Chief Innovation Officer Garry Lyons at the unveiling of mastercard’s new digital payments strategy yesterday (July 14). That strategy is one designed to enable commerce anywhere that a consumer and a connected device happen to be. And one that leverages mastercard’s global acceptance network to power issuer-branded digital payments credentials anywhere buyers and sellers want to do business, including the “yet-to-be-imagined” connected devices that sit on the edge of that network.
But that is just one of the devices and channels that masterpass will power to enable commerce. Any device, across all operating systems will allow customers to use their choice of issuers to make payment in brick-and-mortar (using contactless) or online/in-app conduits, with use of tokenization to ensure that transactions are secure.
“We have evolved our network to enable these connections but built on what our network has always stood for — security, interoperability, ubiquity,” remarked mastercard North America President Craig Vosburg when introducing the invitation-only crowd to the new vision for masterpass and how consumers will “live, work and pay.”
The masterpass Value Proposition
“Up until now, we had masterpass as more of an online offering and then contactless that was deployed within certain banks’ own mobile wallets,” James Anderson, mastercard digital payments EVP, told Karen Webster before the launch. “What we are doing is taking all that contactless expertise, knowledge and ability to deploy and putting it right into masterpass so that the bank and the consumer can have a single, smart digital credential, issued by their bank.”
The contactless payment capability within masterpass is initially to be made available to Android device owners, with “tap-and-pay” ability in store across 5 million separate locations located within 77 countries.
With that reach and payments scope, Lyons emphasized, the real value for consumers and issuers is giving them the same payments method to use across channels — mimicking the look of the plastic cards that consumers have in their wallets with the digital version of that asset that looks identical on their phone. In essence, Lyons said, masterpass, linked with the issuer, is “not a wallet in the literal sense of the word. It is a smart digital credential — the same smart digital credential, in fact, that goes everywhere the consumer goes.”
At the launch yesterday, that vision was demonstrated across a number of technology, device, channel, operating system and shopping “contexts.”
Pay at the Table at the Cheesecake Factory (via “CakePay”) is a cloud-based payments experience that lets consumers use the “device they came with” to check out at the table, in-app, once the meal is over.
Samsung’s “smart fridge,” or the “family hub,” showed how image capture can help consumers remotely look at what they might want to buy at the grocery store when there (“Do I really need more eggs?”) or to see that eggs are running low while standing in front of it and order them right then, in the moment, using FreshDirect.
Booking a trip inside of the Jet Blue chatbot in Facebook Messenger is a one-click experience, as is making a purchase at a Coca-Cola vending machine that counts down the amount of time that a consumer has before the time that they “authenticate” themselves to the vending machine and decide which beverage will really whet their whistle. Buying train tickets at the subway is possible in less than two minutes.
And then, there’s Pepper, the sort of cuddly robot (she’s plastic but cuddly-looking nonetheless) who can take an order at Pizza Hut (now only in Asia) and check out via masterpass.
Anderson said that, with the right support systems in place, all it comes down to is if a merchant actually wants to support a use case and if a specific interface is really what they want or not.
“We want to help merchants commerce-enable the places people shop,” Anderson added, “and the masterpass platform can help them be present where people are doing transactions.”
The Banking Connection
Anderson also emphasized that the aim of this “enhanced version of masterpass” is to bring the issuer together in the consumer’s mind, regardless of use case. He also noted that a number of banks are already supporting the enhanced version of masterpass, including Bank of America, Capital One, Citi, Fifth Third and others.
“It’s a powerful way of differentiating and bringing to life the bank-centric nature of what we are doing,” he said. Lyons mentioned yesterday that this new capability will enable masterpass to automatically enable 80 million accounts.
In most cases, said the executive, the issuing partners will implement a fully converged masterpass experience in order to support a given use case (online), through apps and moving along the payments continuum to include contactless payments — all to be rolled out in stages through the remainder of the year.
“At the moment of truth, when the consumer is on the checkout page, we want to leverage all the associations the consumer has to the bank in terms of trust and positive feelings and remind them that they can use their ‘Bank X Wallet’ by pressing that button,” he explained.
Keeping Convenient Payments Safe
Vosburg emphasized master card’s commitment to making security invisible to the consumer, but powerful.
Eventually, said Anderson, all transactions using masterpass will use tokens from the mastercard Digital Enablement Service (MDES). He likened it to “layers of the stack” — the MDES layer is built with tokenization, the digital payments credentials layer is built with masterpass and, on top of that, other interface technologies will be built. For example, Anderson said, if an innovator wanted to use voice-activated commerce, it would require simply building another interface layer for the existing stack.
“From our point of view, those are all very valid ways of interacting with a digital payments platform. We’ve built the underlying layers of the stack. We are able to exploit those with really trivial amounts of effort. No more needing to build a whole new stack for those specific use cases,” he noted.
For now, Anderson said, the focus will remain on building out and scaling support for contactless, browser and in-app payments, but demos, prototypes and proofs of concept for other interfaces are on the roadmap.
“Deliver today, but be ready for tomorrow,” Vosburg remarked.
Additional details on the Thursday announcement are available here.