Contactless payment methods are already becoming the norm, paving way for a future where mobile phones will supplant wallets, according to MasterCard head of market development, Matthew Barr.
He was speaking at the Communications Alliance Broadband and Beyond 2012 conference in Sydney.
The company has spent the past few years pushing the contactless payment initiative, deploying its PayPass payment card technology and implementing infrastructure to facilitate those kinds of transactions.
Holders of credit cards with PayPass radio frequency identification (RFID) technology can easily tap their cards on compatible point-of-sale terminals to make a purchase that is under $200. The ultimate goal for MasterCard is to incorporate PayPass into mobile phones using near field communications (NFC) technology.
Without the contactless infrastructure in place, the mobile NFC payment concept will remain a pipe dream, according to Barr. So getting the contactless gear into motion is paramount to the future of mobile NFC.
“I can comfortably stand here and say we're passed the tipping point for contactless which then creates a fantastic foundation platform for what we can do with mobiles,” Barr said.
Contactless payment in Australia has gained significant momentum. There are currently eight million PayPass cards in country and 65,000 locations with supported sales terminals. Supermarket giants, Woolworths and Coles, have also both announcing they would rollout PayPass terminals this year.
By April 2014, it will be compulsory for all MasterCards issued to have PayPass.
All this opens up doors for mobile NFC, enabling phones to become wallets and more.
“It's not just about payments, it's about what we can then leverage on the smarts on a phone,” Barr said. “For example, sending alerts back to the phone when the transaction is being processed while the card is still in the wallet – it's pretty straight-forward.
“... Once you get the plastic onto the phone, you start getting some really interesting ideas.”
Those ideas, according to Barr, add value for the customer.
Tech giant, Google, has already teamed up with MasterCard to launch a mobile NFC payment app. Google Wallet was released last year and works on any PayPass terminal although it is currently available on one model of handset. Google plans develop the app for a wider range of phones in the future.
MasterCard rival, Visa, has also jumped on-board the Google Wallet bandwagon, making its Visa payWave system compatible with the app.
But there are still a number of barriers when it comes to mobile NFC payment.
“Collaboration is the keyword for how these services can come to market,” Barr said.
MasterCard will have to work with banks, telcos, handset manufacturers and a number of different parties in order to agree on a strategy, he said.
“That has complexity and it takes time,” Barr said. “But from where we sit and what we are seeing globally, it's just a question of time.
“These services will arrive to the market.”