Mastercard Launches Pilot Program Using Smartphones As POS Devices

Mastercard is testing a cloud-based setup that will “enable contactless payments acceptance via a mobile phone.” This Cloud Tap on Phone will mean that “any business – regardless of size – can deliver new and best-in-class contactless consumer experiences using a device they already own: a smartphone,” Mastercard said in a release.

The company said the setup “democratizes point-of-sale technology by turning an Android smartphone or tablet into an acceptance device — allowing businesses to accept contactless payments (and) minimizing the need to invest in hardware terminals or extra features.” The new pilot program will test the cloud-based point of sale (POS) technology.

Mastercard has partnered on the pilot with NMI and Global Payments along with Computer Engineering Group (CEG), a Napa, California-based independent IT services provider. The software is being hosted on Microsoft’s Azure cloud platform.

"Tap on Phone technology perfectly complements the acceleration of contactless payments in the U.S. market,” said Nick Starai, chief strategy officer, NMI. "This is a groundbreaking step in creating a world that enables merchants to turn their smartphones into a payment acceptance device without the need for an externally paired physical card reader.”

NMI offers “card payment gateways, processing over 1.2 billion transactions a year from retail POS, eCommerce and self-service terminals.”

Milan Gauder, global head of Mastercard’s acceptance solutions group, said his company’s Cloud Tap on Phone pilot “delivers on our promise of groundbreaking products and innovation.”

Mastercard, in its Mastercard Economics Institute’s Economy 2021, looks at the past year's economic trends in order to predict what's coming next for businesses. Mastercard estimates that around 20 percent to 30 percent of the peak of the pandemic-related online shift will be permanent.

The shift includes everything from contactless payments to pick-up orders and "tele-everything." In addition, the trend is now multi-generational, with older people now using more digital services.

Also, in line with the shift is what Mastercard terms "Digital Main Street," or the frequency of brand-new businesses being created online rather than in a brick-and-mortar store. Mastercard predicted that this shift is likely to continue in the future.