What Happened?

Today Mastercard announced a complete overhaul of its Masterpass service which was originally launched in 2013.  While it had been launched with the ability to support online, mobile and in-store (NFC and QR) payments, it had received the most traction for its ability to support online and mobile in-app checkout with a moderate amount of merchant acceptance.  Happily today we see further development of the Masterpass services which will provide for greater adoption by both merchants AND issuers for a truly omnichannel payment service.

The BIG NEWS is that Mastercard will be providing Masterpass APIs and SDKs to issuers so that they can design and build their own branded digital payment solutions to which they can roll out to their customers either as integrated solutions within their mobile banks apps or, as we really expect, in the form of specific bank branded payment apps which will support in-store payments. Meanwhile merchants will also be able be able to use APIs and SDKs to further enable their omnichannel digital acceptance capabilities of Masterpass.

In addition to this news, we will also be seeing newly evolved branding in the marketplace.  The most noticeable change is that Mastercard is  being now spelled with a lower case “c” and Masterpass is now with a lower case “p.”  More of the branding will be rolled out later this month and throughout the Fall of 2016.

 

What Does It Mean?

This means that we will likely see Masterpass showing up in a lot more places than ever before, providing consumers with greater ability to use the service, whether they are buying something from an online website, a merchant mobile app or paying in-store through a contactless terminal.  It will continue to have all of the great features it did before such as storing your card details (from Mastercard and other networks), your shipping information, and payment preferences.  It also provides new capabilities such as paying with points and receiving purchase alerts.

The list of launch partners, both banks and merchants, is very impressive and almost guaranteed to deliver stronger success for this upgraded service.  It includes banks such as Citi, Capital One, Bank of America, SunTrust, etc.  It includes merchants such as Cheesecake Factory, Saks 5th Avenue and Lord and Taylor to name just a few.

First launching in the United States later this month and then moving to Europe, Middle East and Africa by the end of 2016.  Additional rollouts to North and South America, along with the Caribbean will continue into 2017.

 

Why Are We Excited?

As consumers transition into a mode of “Pay Anytime and Anywhere” it is critical for our card networks, issuing banks and the merchant community to upgrade their payment capabilities in order to meet this new demand.  This is particularly true of digital commerce as it continues to grow its share of overall total commerce.  Javelin expects digital commerce to comprise over 12.4% of total commerce by 2020, up from just 9% today, representing almost $650 billion dollars.

We are excited because we will soon be able to use Masterpass in more places than we could before, along with the ability to use more features that come with the upgrade.  Most of all, we are happy to see that the vision laid out for Masterpass provides a roadmap of continual improvements along the way.

 

Author

About Michael Moeser

Michael is the JAVELIN’s Director of Payments. He advises clients on the rapidly changing payments industry. Michael is focused on tracking the evolution of the payments industry, covering specific areas such as person-to-person payments, U.S. and global EMV card migration, digital wallets, merchant acceptance of different payment forms, cross-border payments, real-time transactions, and digital payments.

Michael specializes in assisting clients in developing new payment products or repositioning existing services to capitalize on market opportunities, understanding how to market to particular consumer and small business market segments, and developing new corporate strategies that can transform an existing payments franchise.

Michael brings over 20 years of experience from the payments and consulting industries. Before joining JAVELIN, he led the international small business card portfolio at Visa, launching new and growing existing debit and credit card programs with banks and financial services companies across the globe. Previously, he was the Head of Competitive Intelligence at Capital One, a Payments Knowledge Expert at McKinsey’s Payments Practice, and the Head of Product Marketing at Ondot Systems, a Silicon Valley mobile card control startup. He has presented to audiences around the globe, primarily at Visa and McKinsey client and public audiences.

Michael holds a BBA in finance from the Ross School of Business at the University of Michigan and an MBA in marketing and entrepreneurship from the Kellstadt Graduate School of Business at DePaul University.

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