As with all things in society, shopping has evolved over the years, but never more than during the past decade. With the growth of online marketplaces and then the near ubiquity of electronic payment mechanisms, the global pastime of shopping has forever changed—until it changes again. The personal computer may have once been the gateway to shopping outside of brick-and-mortar stores, but hardware, software and communications advances have disrupted that model.
Mass adoption of smart, connected and mobile devices globally is dramatically transforming consumer behavior and radically altering the day-to-day shopping experience. Today, every device – from smart phone to iPad – is becoming a commerce device. Juniper Research estimates that by 2015, 2.5 billion consumers globally will buy digital goods via mobile devices. And by 2015 the value of mobile payments for digital and physical goods, money transfers, and NFC transactions will total $670 billion, according to Juniper.
But getting there has been a challenge. Consumers can find some forms of mobile payment technology onerous, and some merchants lack the technical expertise and resources to make mobile payments a reality. But they know it’s a priority. According to a study by Forrester and Shop.org, 51 percent of merchants made optimization of mobile payments and checkout a top priority for 2013. And MasterCard’s research shows that when it comes to mobile payments, consumers want convenience, security, and speed.
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That convenience is already available to some extent in individual merchant solutions like the Starbucks app, but how can we take it to the next level and make the mobile payment experience better across thousands of other merchants that may represent different consumers, different products and/or different shopping experiences? For us, the answer is MasterPass, a digital service that allows consumers to use any type of payment card or enabled device to shop from anywhere—by click, tap, or touch. It’s an evolution of MasterCard’s PayPass Wallet Services, which we announced in May of 2012 and have been testing with select merchants and issuers. We know that to be successful any new payment product has to consider all of its stakeholders in its development, which is exactly what we’ve done.
Essentially the biggest selling point of MasterPass for merchants and consumers is its simplicity. It is a platform that gives merchants a compelling set of choices for how to accept electronic payments, no matter where the consumer may be. From a consumer perspective, imagine you’re in a department store dressing room with an item you’d like to pay for and wear out of the store. You can now do so without having to stop at the checkout counter. Or, if you’ve already left the store and decided you should have made a purchase, you can do it without having to return to the store. It’s that kind of convenience and innovation that consumers will expect from mobile payments. In addition, the MasterPass wallets can hold store card information and address books, making mobile payments as simple as one click. And because MasterCard has made MasterPass an open wallet, consumers can store other branded credit, debit, and pre-paid cards there.
For merchants, MasterPass supports the use of various ‘last mile’ technologies, including NFC, QR codes, tags and mobile POS devices that may be used to trigger payments.
The mobile payments space, though still relatively young, is changing rapidly. To stay relevant, and best serve merchants and consumers, convenience, scalability and security must be a priority. The more we can make shopping in its newest forms a pleasant experience, the better positioned we’ll be to help change the face of shopping once again—for the better.
Ed Olebe is senior vice president and group head of MasterPass Services for MasterCard Worldwide. He currently leads PayPass Wallet Services, MasterCard’s digital wallet initiative. Mr. Olebe is responsible for end-to-end management of the product, to include solution development, acceptance, issuance, operations, commercialization and strategy.