Groceries get 'smart' with MasterCard and Samsung

 
Jan. 5, 2016 | by Will Hernandez

A trip to the supermarket might be a thing of the past in the coming years thanks to a partnership between MasterCard and Samsung that enables homeowners to fulfill their grocery shopping list without leaving the comfort of their own kitchen.

Groceries by MasterCard is a new app that Samsung will include in its upcoming smart refrigerator, the "Family Hub." The appliance, which is scheduled to be available to U.S. consumers in May, is equipped with a 21.5-inch, 1080p touchscreen monitor in the right-hand door that consumers can use to shop and select items from their favorite brands.

The companies made the announcement Tuesday afternoon at the annual Consumer Electronics Show in Las Vegas.

For MasterCard, the announcement comes at a time when the company continues to raise its profile as a technology company rather than merely a card network, and as an emerging payments leader in the Internet of Things.

The company announced at the November Money20/20 conference in Las Vegas that it will give companies dabbling in the IoT the ability to add payment credentials to devices — such as key fobs, smart rings and even clothing — through a program that is an extension of its digital enablement service.

"It's evident that MasterCard sees IoT as a tremendous opportunity for the future of payments," Jordan McKee, a senior analyst for 451 Research, told Mobile Payments Today. "As a result of that, they're really starting to get their ducks in a row and ensure that they have the partnerships in place, as well as the platform in place, to start to enable these new connected experiences."

FreshDirect and ShopRite are initial partners with Groceries by MasterCard and will deliver grocery orders from their respective operation hubs. ShopRite has more than 250 stores in the Northeast. MasterCard expects to add more partners in the future thanks to its partnership with MyWebGrocer, which provides e-commerce and digital marketing products to 130 grocers and 500 major consumer packaged goods brands worldwide.

"Commerce-enabled devices like the Family Hub refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchase begins: in the kitchen," Eric Healy, president of MyWebGrocer, said in a statement.

Homeowners who use Groceries by MasterCard add items to a virtual shopping cart and confirm their order with a four-digit PIN that adds a layer of security to the process. Consumers can link any U.S.-issued credit or debit card to the app to pay for their groceries.

MasterCard also will release a companion mobile app to enable users to add items on the go, but for now, orders can be confirmed only from the refrigerator.

MasterCard's growing involvement with the IoT is the result of its desire to go "beyond the payment" with consumers, according to Betty DeVita, chief commercial officer of MasterCard Labs.

"We look at verticals that connect in to the journey of a consumer on an everyday basis and we know that we would like to get ourselves into a place that reduces friction in today's experience and improves consumers' lives," DeVita told Mobile Payments Today in an interview in advance of the announcement.

The grocery sector fits with DeVita's vision as technology over the years has helped to change consumers' expectations of the grocery shopping experience. AmazonFresh, FreshDirect and Peapod have each offered consumers varying degrees of online and mobile grocery ordering for several years.

"Mobile has been a big part of that story and that's why getting grocery stores on board for some of these new experiences is very important because [grocery shopping] is something that we do frequently as opposed to a retailer where you're buying clothes once a month and it's harder to change behavior," McKee said.

DeVita doesn't expect physical supermarkets to become less important any time soon, but believes the IoT is another channel merchants should explore and plan for accordingly.

"How do you ensure that each channel has its own best components and you cater to the [consumer] segments that want convenience and don't want to come to the store?" she said. "It's an interesting journey that everyone is on right now."

DeVita said that MasterCard plans to tokenize payments made through the app "in very short order."

With consumers toeing the line between convenience and security, the aforementioned four-digit PIN combined with tokenization could help put some concerns to rest.

"Consumers must feel that they have the highest level of security with regards to their identification," DeVita said. "Once you get them to that level of comfort, then the rest is about us improving the current experience that exists today."


Topics: Card Brands , Handsets / Devices , In-App Payments , POS , Retail

Companies: MasterCard


Will Hernandez / Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.
View Will Hernandez's profile on LinkedIn

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