MasterCard made two very interesting announcements in recent days, which point to a redefined misssion for the card payment brands (i.e. MasterCard, Visa, American Express, etc.) in our mobile payments future.
First, it announced an agreement with Google and Citibank to pilot NFC-enabled Android phones as payment instruments, and secondly it announced that it certified its new PayPass/NFC payment application to work with Gemalto’s UICC chip technology. Gemalto said it is partnering with a UK financial institution (reportedly Barclays) and mobile operator to roll out this announced NFC payment technology.
What struck me about these announcements were the parts that weren’t announced. In the first instance, MasterCard undoubtedly plans to leverage its information on consumer purchasing patterns to help Google deliver the right ads at the right time to subscribing retailers. This is a very big deal as the card brand tries to shift its value from providing a payment network to becoming an information network.
In the second instance, MasterCard acknowledges it needs Gemalto to pull off mobile payments. Gemalto knows how to provision and operate secure often-chip-based payment applications, and of equal import, has integrated its own systems with the billing systems at some 400 telecommunications operators. These operators control some 90% of consumer mobile handsets through their sales and contract policies.
These relationships and missions are new for payment card brands like MasterCard. Up until now, the card brands have not had any notable role in delivering targeted electronic advertisements. And until now, they haven’t had to rely on direct connections between carriers and consumers to do their jobs. The mobile carriers are essentially replacing merchant banks and traditional processors as the ‘acquirers’ of (mobile) payment transactions.
It’s a new era for the payment card brands and MasterCard seems to be leading the small pack of them by recognizing what it needs to do to stay relevant.
Of course – the last thing I would want as a consumer is a bunch of targeted ads showing up on my smart phone. So all of this is OK with me as long as I have one big OPT OUT button on my handset.
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