MasterCard Pursues No-Touch Retail

MasterCard International Inc. Vice President Oliver Steeley is working to make contactless payment available to millions of Americans. Contactless payment is where a customer authorizes a charge to a credit card without the credit card being touched, often by using a key fob, a smart credit card or a chip embedded in something else (such as a cell phone or wristwatch).

The authorization is sent to a reader wirelessly, from which it is then communicated to a POS (Point of Sale) unit, which might be a significant distance away.

The major card companies—including MasterCard, Visa International Service Assoc., American Express Co. and Discover Card—are embracing contactless payment for its convenience.

Click here to read about the security questions raised by the new contactless payment systems.

Credit card firms are also working to make it easier for retailers to use contactless payment in all kinds of purchases, including small purchases where cash would typically be preferred.

But the initial credit card contactless offerings still require customers to present the card to make the purchase.

Steeley, MasterCard International’s vice president of wireless payment devices, said he envisions a much more convenient world in which almost anything can become a virtual POS and MasterCard can play a major role.

A customer walking up to a display for a new movie, for example, could point a payment-enabled cell phone at one part of the display and instantly order movie tickets; another part of the display might download movie-themed ring tones for immediate use.

These ideas are just drawing board concepts and are years away from deployment, but they allow a sneak peek into the thinking of one of the world’s largest credit card firms as it envisions a very different future.

Another scenario from Steeley would allow a consumer to take a picture on a cell phone, then tap the phone against a television to have it display the picture.

A video could be played through a home surround system. A phone conversation could continue while the consumer walks around the house, where a series of microphones turns a suburban colonial into the world’s largest speaker phone.

Developments like these are the next logical step for the contactless technology already in use, such as key fobs that automate a customer’s payment for cash at the pump (ExxonMobil’s SpeedPass) and a visor-based chip that can speed cars through a tollbooth without ever stopping (EZPass).

MasterCard said it wants to take a central role in expanding contactless payment. But, Steeley said, the first step might very well be ditching the credit card itself and giving that payment power to some other device, most likely a cell phone.

“People think of MasterCard as a credit card company. But the truth is that we’re about a payment brand and, in the future, we’ll be less about the card itself,” Steeley said. “The form factor issue is a crucial and critical one for the payments industry. Payments will be less about the cards and more about how devices communicate with one another.”

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