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The Green Sheet Online Edition

April 28, 2014 • Issue 14:04:02

The Mobile Buzz:
MasterCard: M-payments tipping point has arrived

Editor's Note: Editor's note: This article is reprinted courtesy of Open Mobile Media, a part of FC Business Intelligence Ltd. Copyright Open Mobile Media; all rights reserved.

In advance of the Open Mobile Summit, to be held in London, May 19 and 20, 2014, U.K.-based event organizer Open Mobile Media (www.openmobilemedia.com) issued a white paper, Building the Blocks for Mobile Commerce, that details a conversation between tech journalist Susan Kuchinskas and Hany A. Fam, President for Global Strategic Alliances at MasterCard Worldwide. The discussion focused on MasterCard's conviction that mobile payments have finally reached an acceptance tipping point.

Susan Kuchinskas: Do you think consumers are really ready to adopt mobile payments? There have been so many failed attempts.

Hany A. Fam: The willingness to use mobile payments has never been higher. Our latest research shows that, in 2013, 81 percent of social media conversations related to mobile payments were driven by adopters, versus 32 percent in 2012. The handset manufacturers have made their interfaces and devices user-friendly, not just for payments but for digital convergence overall.

Consumers want these devices in their lives, and they want them all to talk to each other. The consumer expectation is that they are able to interact and transact across multiple channels. It's broader than just payments.

Kuchinskas: MasterCard says it is building "the operating system of digital commerce." What does that mean?

Fam: We're not just fixated on how you shove the number on the credit card onto a mobile device; that's so not it. It's about creating an OS that all players in the value chain can embrace. It means bringing all the pieces together in such a way that consumers don't have to connect the individual pieces themselves. We believe that, in the very near term, every digital device will become a commerce device, but consumers don't want to see the plumbing behind it.

Kuchinskas: Are all those pieces there, or do some still need to be built?

Fam: We've been involved in this for a long time. We wrote the standard for NFC (near field communication), and we have more than 30 mobile partnerships around the world. We have the fastest globally consistent payment network in the world. You need to be able to say [that] these things will work anywhere on the planet. Next, any device that connects to the MasterCard network connects through a consistent API. That's not a small achievement.

The third, very big area is security. Can this device handle a secure token or credential and pass that to the network? That's heavy lifting, and something consumers don't give you credit for. But in the scheme of the operating system for digital commerce, those things are important. We have all those pieces globally today. The last part is protecting the consumer and their credentials, so we're not passing around live numbers through the system. We're passing unique tokens.

Kuchinskas: You've partnered with network operators in Europe to enable contactless mobile payments and mobile wallets. Do you have to get this done country by country?

Fam: We've gone player by player, getting stuff going, taking things live. The partnership with Syniverse is one of a new breed. Syniverse connects to 1,000 mobile network operators around the world.

MasterCard already connects to financial institutions, retailers and others. Once we've built the bridge between us, we are able to enable players through a single connection to us to be able to do all these things. Then, you don't have to go one by one and country by country. We'll be able to say to a global retailer or telco, 'Through one connection, you can reach the world.'

Kuchinskas: What are the barriers you see to implementing this vision?

Fam: This year versus last year, I'm much less worried about consumer education and adoption. Using mobile payments is very intuitive. We will always continue to work on global common standards. There are a lot of standards, like near field communication or MasterPass. But we need to work on bringing them together so they'll be a standard on the phone.

Finally, we've made our API available to anyone who wants it to enable payments in their apps. MasterPass can store credentials from any brand, not just MasterCard. We'll continue to educate and inform them to make sure there is consistent adoption of APIs among app developers. end of article

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