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Last updated: May 8, 2012 8:01 pm
MasterCard, the payments processing network, unveiled new digital wallet services designed to enable banks and retailers to take advantage of anticipated growth in electronic payments.
Under the name PayPass, MasterCard is creating a unified network that will enable merchants to accept digital payments made by consumers either electronically in stores or online using a smartphone, computer or tablet.
MasterCard will also offer services to help retailers, banks and technology companies to build digital wallets as well as let other parties that have their own wallets plug into their PayPass network.
The services will be rolled out in the third quarter first in the US, Canada, the UK and Australia, and then in other countries.
Edward Olebe, head of PayPass wallet services at MasterCard, said the services are meant to encourage adoption of digital wallets. “We have smartphones and we have the technology. Why aren’t we getting broader adoption?” he said. “The one thing missing is connecting these.”
For PayPass wallet services, MasterCard is partnering with merchants including American Airlines and Barnes & Noble as well as financial institutions such as Citibank, National Bank of Canada, Banesto and Intesa Sanpaolo. Technology partners include Intel, Sage Pay and Vantiv.
MasterCard made its announcement at the start of the CTIA wireless industry trade show in New Orleans which began on Tuesday, underscoring the importance of the telecommunications industry to the deployment of digital wallet services.
Mobile payments are expected to grow as consumers increasingly use devices such as smartphones equipped with technologies such as NFC (near field communications) instead of cards to purchase goods and services.
Isis is due to start trial of its NFC-enabled digital wallet service in several cities this summer ahead of a nationwide commercial rollout.
US telecommunications companies view mobile wallets as a new growth opportunity. “Mobile payments is a very promising area for us,” Ralph de la Vega, chief executive of AT&T’s mobile unit told the Financial Times at CTIA. “I don’t think it will be long before electronic wallets replace physical wallets,” he added. “With ISIS we are building the ‘back office’. We have to make sure that mobile wallets are both simple to use and secure.”
Like other telecoms executives, Mr de la Vega believes the success of mobile wallets will depend on enabling consumers to use their existing credit and debit cards with their digital wallets, rather than forcing consumers to sign up for new cards.
The Isis consortium has already announced partnerships with all the major card processors including MasterCard.
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