MasterCard releases mobile payments index, launches PayPass Wallet Services at CTIA

A major theme coming out of CTIA Wireless in New Orleans this week is mobile payments.  This theme manifested itself on Monday with two major announcements by MasterCard.  The two announcements included results from a mobile payments readiness index produced by MasterCard, as well as the launch of PayPass wallet services.



A major theme coming out of CTIA Wireless in New Orleans this week is mobile payments.  This theme manifested itself on Monday with two major announcements by MasterCard.  The two announcements included results from a mobile payments readiness index produced by MasterCard, as well as the launch of PayPass wallet services.


According to Ed McLaughlin, chief emerging payments officer at MasterCard (New York), every smart device will become a commerce device in the future.  “The way people interact is changing,” says McLaughlin. “Mobile is so transformative…because being online is always with you.”


The company first announced its Mobile Payments Readiness Index, which analyzed 34 countries and rated their readiness for the full adoption of the three main mobile payment services: person to person, web commerce and mobile contactless payments.


The MasterCard index ran on a scale of zero to 100, with 100 representing the complete replacement of plastic cards by mobile devices.  With an average score of 33.2, the 34 countries readiness for mobile payments ranged from 22.4 to 45.6.


The scores were based on six different components: environment, infrastructure, regulation, consumer readiness, financial services and mobile commerce clusters.


Singapore led all 34 countries with a readiness score of 45.6, and took the top spot in two of the six components: regulation and infrastructure.  According to the report, 100% of Singapore’s population is covered by a mobile network compared to a 94% average.  Singapore also has well-regulated and well-developed laws in place relating to information and communication technology.


Canada ranked second in the index with a score of 42.0, largely because of its mobile commerce clusters that are already in place. According to McLaughlin, 10% of all MasterCard transactions in Canada are currently contactless.


The United States was third with a ranking of 41.5.  The United States ranked highest in the environment component, which was driven by high household expenditures per capita- roughly $33,000 compared with an average index of $11,000, says the report.


Kenya came in fourth overall with a score of 40.4, driven largely by consumer readiness in the country.  Japan came in sixth with a score of 39.6, but lead in the financial services component due to how well they treat their consumers.


The countries that ranked lowest in the index were Italy (25.5), Indonesia (24.0), and Argentina (22.4).


The second announcement by MasterCard at CTIA was the launch of its PayPass Wallet services.  The PayPass Wallet service delivers three components – PayPass Acceptance Network (online and contactless payments), PayPass Wallet, and PayPass API.


PayPass Acceptance Network provides a globally consistent service for merchants to accept electronic payments whether the purchase is made in a store with NFC technology or online.  PayPass Online provides users with a simple check-out process by eliminating the need to enter shipping and card information with every purchase.  This information only has to be entered into the system one time, and after that only a password is required to access that information and purchase goods.  


The other components allow merchants, banks and partners to use the service in two ways.  The PayPass Wallet can be used as a white label, digital wallet service that allows consumers to store payment and shipping information online in one secure place.  The service, which can be integrated and branded by a company, is also an open platform.  This means that consumers can use American Express, Discover, Visa and other branded credit, debit and prepaid cards.


The other component, PayPass API, allows partners to connect their own digital wallets into the PayPass Acceptance Network, leveraging MasterCard’s check-out, fraud detection and authentication services and enabling their customers to make purchases.


MasterCard will make PayPass Wallet Services available to partners in the third quarter of 2012, initially in the U.S., Canada, U.K. and Australia.  Major partners of MasterCard’s PayPass Wallet include American Airlines and Barnes & Noble.  Both companies will incorporate the PayPass Online checkout button on their websites.