MasterCard announced Monday that it is launching a mobile wallet platform called PayPass Wallet Services, an update to its PayPass NFC payment system. The product will work frictionlessly both online and in-store, making it much more versatile than other wallet apps on the market. Also, anyone who wants to partner with MasterCard is welcome to do so.
PayPass Wallet Services, which is scheduled to launch in the third quarter of this year, will be made up of three distinct services. First is the PayPass Acceptance Network, which includes both online and brick-and-mortar retail. Online, users can simply click one button to pay — instead of entering billing and card number information — and in-store, they can just tap their phone to pay. American Airlines and Barnes & Noble will be some of the first merchants accepting PayPass online checkout. Judging from its description, this part of the product sounds about as simple as PayPal — the name is eerily reminiscent, too.
The PayPass Wallet itself is the second component, which is the consumer-facing side of PayPass. It can be white-labeled by banks or merchants, and is totally open — even Visa or Amex can use it if they like.
And finally, PayPass API is an open API that allows for partners to “connect their own digital wallets into the PayPass Acceptance Network.”
It’s never easy to tell what an application will look like, or exactly how it will work from a dry press release, but a couple of things stand out here. For one, MasterCard seems to have identified the form of payment most in need of change: online credit and debit payments. While PayPal allows for one-click payments, it brings a third party into the mix, and one assumes that most people like to limit the number of intermediaries in a transaction. MasterCard’s PayPass will finally allow customers to make transactions online as easily as they do in person. Many mobile wallet boosters seem to neglect the fact that in-store payments are actually quite frictionless and easy already — it’s online payments that could stand to be simpler.
Secondly, it’s worth noting that MasterCard has launched a network in addition to an app. So it’s open for other developers to use and perfect. MasterCard’s network also hosts the Google Wallet, one of the best-known mobile wallet applications. However PayPass is more of a platform than an application itself — it won’t, in other words, necessarily force you to share information with Google, which is the idea behind Google Wallet. Already Citibank, Fifth Third and Sovereign Bank have announced that they will be working with MasterCard PayPass.
This is the advantage that a payments company brings to the development of a mobile wallet — they simply do not care whose money goes through their system, so long as it goes. While ISIS is run by three mobile carriers, and Google Wallet is owned by the tech company, in a partnership with Citibank and MasterCard, PayPass is completely agnostic when it comes to what type of phone, card or carrier the money comes through. That could be transformative for an industry with so much promise, which has delivered so little.