Global financial groups battled Monday to control the lucrative future of “mobile money”, which will enable people to use a smartphone to go shopping instead of cash and credit cards.
Financial groups are battling to control the lucrative future of ‘mobile money’, which lets people pay via a smartphone. MasterCard, Visa and online payments service PayPal are struggling for a slice of the industry as the world’s biggest mobile fair, Mobile World Congress, opens in Barcelona, Spain.
MasterCard, Visa and online payments service PayPal struggled for a slice of the industry as the world’s biggest mobile fair, Mobile World Congress, opened in Barcelona, Spain.
It is a market with potentially rich rewards.
The mobile money industry is expected to grow from $13.8 billion (10.4 billion euros) in 2013 to $278.9 billion by 2018, according to a study released this month by global research group MarketsandMarkets, which estimates there will be about 5.3 billion mobile phones worldwide this year.
MasterCard announced a new digital payment system that lets people use a wide variety of devices including smartphones.
The system, known as MasterPass, stores customers’ banking and personal information in a “secure cloud” online where it is available for the moment of payment whether in a store on when browsing the Internet, the group said.
Banks and stores will be able to issue their customers with MasterPass-connected “digital wallets”, which would accept credit and debit card information, including cards other than MasterCard’s, the group said.
Shoppers would be able to use MasterPass on the web without having to key in their bank information and delivery address for each purchase.
But they also could make payments with the new system in other ways, including by waving a smartphone equipped with Near Field Communications, or NFC, technology near a special reader.
MasterPass will be launched in Australia and Canada by the end of March before expanding to other markets.
On the same day, Visa unveiled a global alliance with smartphone leader Samsung to let people make payments with NFC-equipped Samsung smartphones.
Under the deal, Samsung will equip the next generation of its mobile devices with Visa payment technology, including by pre-loading Visa’s contactless payment system — Visa payWave — in its mobiles with a mini-programme known as an applet.
A customer pays via a smartphone application in a Auchan supermarket near Lille, northern France. The mobile money industry is expected to grow from $13.8 billion (10.4 billion euros) in 2013 to $278.9 billion by 2018, according to a study released this month by global research group MarketsandMarkets, which estimates there will be about 5.3 billion mobile phones worldwide this year.
Samsung will let banks send payment account information over the airwaves to a secure microchip embedded in its devices. Banks in turn will use a secure system relying on Visa’s so-called Mobile Provisioning Service and Samsung’s digital key management system.
Visa said the deal had the potential to “significantly accelerate” the availability of mobile payments globally, noting a forecast by ABI Research that 1.95 billion NFC-enabled devices will ship in 2017.
But some in the industry are sceptical.
“I think NFC is just a technology in search of a problem to fix that does not exist because it is really easy to pay in the store,” the president of eBay subsidiary PayPal, David Marcus, told journalists at the congress.
Five days before the World Mobile Congress, PayPal announced it was expanding its move into MasterCard and Visa’s territory.
Marcus showcased a new PayPal device, which lets cash-based businesses accept PIN-number based “smart” debit and credit cards.
Merchants will be able to download a Paypal Here application for their Android or iPhone smartphone and then pair the handset with the new device, which they have to buy. The device can accept secure payments and issue receipts. For each transaction, whether by credit card, debit card or PayPal account, PayPal receives a “small fee”.
Similar PayPal technology is already being used in the United States for payment cards that are swiped, but it was unable to handle cards with embedded microchips and PIN numbers.
* Visa, Samsung in global deal for mobile payments
US credit card giant Visa announced Monday a global alliance with Samsung to let shoppers make payments by waving their smartphones near a special reader.
The deal could significantly boost the long-touted use of smartphones to pay for goods worldwide without any physical contact, and without the need either for credit cards or cash, it said.
The system could be used by owners of Samsung smart phones equipped with a technology known as Near Field Communication, or NFC, which lets a phone transmit information to a nearby reader without touching it.
“A Samsung device equipped with the Visa contactless payment service is a powerful proposition and will allow us to make mobile payments a reality for people around the world,” Visa Europe vice president Mariano Dima said in a statement.
The success of the new system agreed between Visa and Samsung, the world’s leading smartphone manufacturer, will still depend on whether banks can be persuaded to use it.
Visa said the deal had the potential to “significantly accelerate” the availability of mobile payments globally, noting a forecast by ABI Research that 1.95 billion NFC-enabled devices will ship in 2017.
Visa revealed the agreement on the first day of the Mobile World Congress in Barcelona, which is trying to raise awareness of the advantages of NFC, including by letting participants use “NFC badges” on their mobiles to enter.
Some in the industry are sceptical about NFC’s usefulness, however.
“I think NFC is just a technology in search of a problem to fix that does not exist because it is really easy to pay in the store,” the president of eBay subsidiary PayPal, David Marcus, told journalists at the congress.
The agreement with Samsung is the first of its kind between a leading manufacturer of NFC-enabled smartphones and a payment network, Visa said.
Under the deal, Samsung will equip the next generation of its mobile devices with Visa payment technology, including by pre-loading Visa’s contactless payment system — Visa payWave — in its mobiles in a mini-programme known as an applet.
Samsung will let banks send payment account information over the airwaves to a secure microchip embedded in its devices. Banks will use a secure system relying on Visa’s so-called Mobile Provisioning Service and Samsung’s key management system.
Source: AFP