MasterCard held an event in New York City this week to show off its latest innovations in mobile payments, including the upcoming Google Wallet service, which is expected to launch this month. MasterCard is pushing its mobile payment systems worldwide. In the U.S. the company is working with Google as a launch partner for Google Wallet. Eventually, Google Wallet will be open to all credit cards and banks, but for its launch Google is working with MasterCard, Citibank, and wireless operator Sprint Nextel.
Google Wallet users will be able to add their credit card information from their Citibank MasterCard to the Google Wallet, and then, using a technology called Near Field Communications or NFC, they’ll be able to make purchases just by touching their phone to a reader. Initially, the only credit card they'll be able to use other than the Google prepaid debit card is a Citibank MasterCard. But after the exclusivity ends a few months after Google Wallet's launch, Google will allow other credit cards to be added. The goal is to make this an open Wallet, but Google must first strike deals with other credit card companies and banks to allow them on the platform.
MasterCard offers a free app that lets smartphone users find the closest store or location with a PayPass reader. PayPass is a payment method that lets you tap a credit card or a phone with an NFC chip in it to make a payment. MasterCard has more than 144,000 merchant locations already equipped with the PayPass terminals, including all New York City taxi cabs. This means Google Wallet can be used from any of these locations.
Forget about digging in your pocket for change or trying to iron out that crumpled dollar bill. Soon we’ll be using our phones to pay for a Coke. This modern vending machine has a touch screen that lets you select your beverage. And it uses the PayPass system, so Google Wallet users can purchase a Coke just by tapping their phone to the payment pad.
Old-school vending machines can be retrofitted with PayPass readers so people can use their smartphones to buy snacks and drinks. Unfortunately, during the demo, the vending machines, which are connected via a cellular wireless network to get authorization for payments, could not complete a transaction. Apparently, the cell signal was bad. So even though we may not have to deal with machines that eat our coins or spit out crinkly dollar bills, we’ll be dealing with the frustration of a dodgy network connection.
Aside from Google Wallet, MasterCard has been working on several new applications for mobile payment technology to make shopping and purchasing things even easier. In its labs the company is developing an application that lets phones zero in on a QR code to make a payment for something seen on the Home Shopping Network. When viewers scan the code, the item and the price pop up on the smartphone screen and people can either click to pay for it or put it in their shopping cart for later.
For consumers who are even too lazy to get off the couch so their phone can read a QR code, MasterCard is also working on an application that will allow a phone to "listen" for a purchasing opportunity. For example, a brand promoting a product on TV could broadcast a high frequency signal as part of a TV commercial. There might be an icon in the commercial to let viewers know they can buy the product via their phone. They use the app to scan the audio which listens for the high-frequency purchase code. And like the QR codes that they can scan on the TV, they have the option of adding the product to their cart or buying it right away.
MasterCard also showed how QR codes can be used in display advertising in stores, subway stations, or other places where marketers put up posters. The example MasterCard used was a concert poster that had a QR code and also an icon that indicated that it could also read payment information via an NFC chip. Once consumers scan the code, they're given the option to see a video of the band and buy tickets to the concert. Again the payment can be made right from the credit card information stored on the phone.
Using the QR code reader or the NFC capability on smartphones, fast food restaurants can let customers see the menu, order what they want, and pay for it directly from their phones. When a code is scanned or a phone is swiped in the NFC reader, a menu pops up. Then people can check off what they want to eat and hit Send. Their credit card is charged via the MasterCard functionality. And when the food is ready it’s delivered right to the table.