Mastercard to let users pay via smartphone app
Mastercard is introducing a new digital wallet in an effort to satisfy growing demand from consumers who want to be able to pay with a simple tap on a screen.
11:20PM BST 08 May 2012
The US credit card giant will introduce a service that allows shoppers to make payments using their smartphones in stores or an app on websites of participating retailers. American Airlines and Barnes & Noble are among the retailers that have already signed up to the PayPass Wallet service.
“Consumers are looking to pay for goods when, how and where they choose,” said Ed McLaughlin, a director at Mastercard. Retailers “want flexibility to easily accept digital payments so they can convert more browers to buyers both online and in store”.
The credit card’s service will be the latest to reach a market that has already seen Visa, online search engine Google and electronic payment specialist PayPal make similar efforts to anticipate a world in which swiping a plastic card or Chip-and-PIN are no longer the chief forms of payment. The popularity of Apple’s iPhones and a range of Android-based phones are putting pressure on companies to make it easier for to shoppers to make payments from a device that is often also their stereo, television and phone.
“The majority of our customers are still putting in all their details when they make a payment online,” said Geoff Iddison, who runs Mastercard’s e-commerce business. “The goal is to simplify consumer purchasing online and offline.”
Last week Mastercard reported a 21pc increase in first-quarter profits as electronic payments accounted for an increasing share of the total payments that consumers make. Profits climbed to $682m (£422m) in the first three months of the year, while revenues rose 17pc to $1.8bn. Mastercard still trails behind Visa, which has more than 50pc of the market.
Visa has also stressed that its service will make it easier for consumers to shop online without having to input the amount of information that is currently required.
Mastercard said that the service will be available in the US, the UK, Canada and Australia this year before it is introduced elsewhere.
Shares in Mastercard closed down 1pc at $431.64 in New York.