It didn’t take long for U.S. financialinstitutions, in particular credit unions, to take an interest inMasterCard Inc.’s new MasterPass digital wallet service, which thecard network announced in late February at a mobile-paymentsconference last week in Barcelona.
PSCU, Co-op Financial Services and The Members Group all havepartnered with MasterCard to offer MasterPass to their memberfinancial institutions, which will enable their members initiallyto shop online without repeatedly having to enter their shippingand card information with each purchase they make. Later, thosesame members will be able to conduct mobile point-of-sale paymentsvia Near Field Communication, QR or bar codes, or othertechnologies, depending on what their financial institution decidesto support.
Visa Inc. made its own mobile-payments announcement at theconference, saying Samsung has agreed to factory-install the cardbrand’s payWave contactless service in special NFC chips the phonemanufacturer will include in all of it next-generation smartphones.They expect some 100 million such phones to be sold over the next12 months.
Both announcements represent a major event for mobile payments inthe U.S. Though both card brands initially are focusing theirmobile efforts overseas, where mobile and contactless payments arerelatively further along, the U.S. won’t be far behind, perhapsonly a few months.
Various U.S. financial institutions have gone through the testingof mobile-payment services, but one of the major obstacles theysince have faced is getting them out to their customers quickly,securely and en masse. The support now from the major card brandswill help to overcome that obstacle and enable banks and creditunions to finally make a play in the mobile-payments market, wherethey surely will have an advantage over newcomers in the space.Consumers traditionally have trusted financial institutions withhandling their financial services, and that will surely evolve toinclude mobile payments over time.
Visa and MasterCard are giving financial institutions a cleardifference in mobile strategy. Whereas Visa is putting all of itsmarbles in NFC with its Samsung announcement, MasterCard’sMoneyPass leaves it up to financial institutions supporting thewallet to decide which technology to support. In both situations,financial institutions may incorporate the mobile-payment servicesinto their mobile-banking applications.
As Mercator Advisory Group continues to evaluate mobile-paymenttrends, I’d be interested in hearing directly from financialinstitutions about which brand’s strategy seems most tied to theirown mobile strategies, and why. I’d also be interested in learningwhether the card brands’ announcements are bringing financialinstitutions closer to offering mobile-payment offerings and, ifso, whether they would include the service with theirmobile-banking service, or keep it separate.
