MasterCard Worldwide

Headquarters: 
United States

MasterCard spearheaded the move to contactless-card payment in the U.S. with its PayPass technology.

The payment brand was instrumental in getting some large U.S. chains to accept contactless payment—in large part by subsidizing their terminals. Among the merchants to take contactless payment are McDonald’s restaurants and 7-Eleven convenience stores. MasterCard also encouraged the first big issuer, JPMorgan Chase, to roll out the bank’s blink contactless card in 2005, though Chase also began issuing Visa contactless cards.

Even before that, MasterCard was experimenting with contactless-mobile payment, launching probably the first trial in the U.S. in 2003, in Irving, Texas, which was little more than PayPass cards glued to the back of some Nokia phones.    

Always more flexible with its contactless application than its more conservative rival Visa, MasterCard allowed Turkey’s Garanti Bank to begin deploying contactless cards in July 2006 and process the transactions using magnetic-stripe data, instead of the more secure, and more expensive, EMV standard--despite the fact Turkey was rolling out EMV at the time. It helped lead to the first contactless rollout in continental Europe.

MasterCard, however, watched as Visa Europe led the higher-profile launch of contactless payment in the UK, in September 2007, with big issuer Barclaycard in London. But Barclaycard, in the spring of 2009, said it would be working with PayPass, not Visa payWave, as it develops mobile-payment and other NFC services with mobile operator Orange UK.

And MasterCard has been capturing co-branded card programs on the Continent, outbidding Visa, and is adding PayPass to the mix. Issuers, such as the banking arms of big retail chains Carrefour Group and Auchan Group in France, and banks connected with Lufthansa’s Miles & More frequent flyer credit card in Germany, include a contactless interface on their cards. In the case of Carrefour and Auchan, they also deploy terminals to accept contactless payment. Moreover, MasterCard is lowering interchange in Italy to boost PayPass. The card scheme also has opened a significant contactless presence in Poland.

In Asia, despite PayPass activity in Taiwan, South Korea and Malaysia, MasterCard plays second fiddle to Visa for contactless payment, in large part due to MasterCard’s smaller market share. The “rollout” of NFC services in Malaysia with Maybank and Maxis Communications is a Visa program.

But MasterCard participated in one of the largest NFC payment trials to date in Asia, a now 3,000-phone trial in Bangalore, India, with Citibank. MasterCard also joined with Citi for a pivotal trial in the U.S., which launched in New York City in December 2006. The trial enabled about 300 users to tap their Nokia NFC phones to pay wherever PayPass was accepted at the time in the U.S., including a line of the New York City subway.

MasterCard has been first off the mark in clearing a path for direct payment of transit fares by contactless bank cards. Commuters also could one day tap their credit, debit or prepaid bank accounts to cover fares with the same applications on NFC phones.

In 2008, MasterCard introduced an “Over-the-Air Provisioning Service” designed to make it easier for issuers to personalize PayPass applications to customer phones over-the-air, including offering a standardized way for trusted service managers to access the PayPass files. TSMs, however, can get by without it. The service was to get perhaps its first use in Europe in a trial planned by Norwegian bank DnB NOR and telco Telenor early in 2010.

The OTA service is part of the MasterCard Mobile Program, which MasterCard has been promoting--although MasterCard has trailed Visa in spelling out a coherent mobile strategy.

Still, MasterCard early on showed a greater willingness to cater to issuers, which want their brands more prominently featured on handset screens in planned mobile-wallet applications.

And in addition to allowing mag-stripe contactless card rollouts in such EMV countries as Turkey and Canada, MasterCard was also the first international card scheme to accept detailed rules adopted by French mobile operators and banks for planned commercial launches of NFC mobile payment service—even though the rules could differ from the way MasterCard issuers conduct mobile transactions elsewhere, once NFC gets started.

Yet, despite its years of promoting PayPass, MasterCard still has not released transaction figures for contactless payment in the U.S. or elsewhere and does not break out figures for PayPass cards and merchant locations by country or region.

Key figures: 
MasterCard Worldwide Cards POS Volume 2009* POS Volume 2008* Cards 2009**
Asia-Pacific, ME, Africa 326 287 268
Canada 82 88 47
Europe 543 573 200
Latin America 98 96 123
U.S. 804 856 328
Worldwide 1,852 1,900 966
*In billions of US$  **In millions, credit, debit and charge
Source: MasterCard Worldwide for years ending in December
PayPass Worldwide Q4 2009 Q3 2009 Q2 2009 Q1 2009 Q4 2008
Cards 70 66 61 55 50
Terminals .200 .174 .153 .146 .141
In millions
Source: MasterCard Worldwide
Key NFC Personnel: 
Ed McLaughlin, chief emerging payments officer
Mung-Ki Woo, group executive, mobile
James Anderson, SVP, mobile
Terrie Smith VP, business leader, mobile product development
James D. Davlouros, business leader, mobile
Major NFC and Contactless competitors: 
Last Updated: 
Aug 2010
Author: 
Balaban

HEADLINE NEWS

In-Depth: Persistent Consumer Security Fears about Mobile Payments Prove Difficult to Dislodge

NFC TIMES Exclusive Insight – Results of yet another survey has shown that a significant percentage of U.S. consumers continue to harbor security fears about using their smartphones for payments, a stubborn problem that has hindered growth of mobile payments from the beginning.

Mobile Suica Still Accounts for Disappointing Share of Suica Users and Transactions in Japan

NFC TIMES Exclusive – While Apple Pay next month will mark the 5th anniversary since its launch in the U.S., there is another contactless-mobile payments service that is three times as old as Apple Pay–Japan’s Osaifu-Keitai, or wallet phones, which this year turned 15. 

Rome Latest Transit System to Launch Open-Loop Fare Collection; also Enables Monthly Passes with EMV Cards

NFC TIMES Exclusive Insight – Rome has become the second major city in Italy–and one of a small but growing number of large cities globally–to enable riders to pay transit fares with EMV contactless credit, debit and prepaid cards and NFC devices.

Vivo Last of Major Chinese Smartphone Makers to Officially Launch NFC Pays Wallet

NFC TIMES Exclusive Insight – Vivo, China’s second largest smartphone maker, made it official this week, launching its NFC-enabled “vivo Pay” wallet, the last of the major Chinese phone OEMs to roll out NFC payments–though their use has been disappointing, at least for payments in stores.

In-Depth: Fit Pay’s Troubles Indicate Difficult Business Case for Provisioning to Wearables

Sep 19 2019

NFC TIMES Exclusive Insight –  Given the poor financial results of U.S.-based Fit Pay, it’s becoming clear that the business case for provisioning of payment cards to wearable devices remains difficult.

Analysis: Chase Pay Latest Bank Wallet to Shut Down; Why Did They Fail?

NFC TIMES Exclusive Insight – Plans disclosed this week by JPMorgan Chase to shut down its Chase Pay app for in-store purchases is yet another nail in the coffin–perhaps the final one–for bank wallets in the U.S. And the situation does not look much brighter for bank-issued wallets abroad.

Miami Latest U.S. City to Introduce Open-Loop Transit Payments

NFC TIMES Exclusive Insight Transit officials in Miami-Dade County, Fla. are the latest in the U.S. to introduce open-loop payments of fares with contactless credit and debit cards and bank card credentials on NFC wallets, launching the service yesterday on the city's relatively small metro network, with plans to expand to buses later.

UK Tram Riders Take to Tapping with NFC phones to Pay for Fares, According to Early Results

NFC TIMES Exclusive – Transport for Greater Manchester, which last month launched open-loop payments on its large Metrolink tram network, said Thursday that contactless credit and debit cards and NFC wallets accounted for a combined 170,000 rides during the first four weeks of the service.

In-Depth: NFC Wallet Use for Open-Loop Transit Grows but Still Makes Up Relatively Small Share of Contactless Payments

NFC TIMES Exclusive – When New York City transit officials announced Tuesday that the 1 millionth ride paid for through their new OMNY open-loop payments service had arrived ahead of schedule, they also proudly noted that 80% of the contactless payments had come from NFC wallets, not physical bank cards. 

PayPay Gets Off to Quick Start as One of Many Digital Payments Services in Cash-Loving Japan

NFC TIMES Exclusive Insight – As Japan continues to fight what to date has been a losing battle against cash, an announcement by the joint venture behind QR code-based payments service PayPay offers a little bit of encouragement. 

Research Firm Projects Use of NFC Mobile Wallets in U.S. to Remain Disappointing This Year

NFC TIMES Exclusive Insight – As Apple Pay approaches the fifth anniversary of its launch in the U.S., there is more research showing that most American consumers simply don’t see the value of tapping to pay with NFC-based payments services. 

In-Depth: Five Years After Transport for London Launched Contactless Across Its Transit Network, UK Open-Loop Rollout Remains Uneven

Aug 15 2019

NFC TIMES Exclusive Insight – Five years ago next month, Transport for London introduced open-loop contactless payments across its transit network, including metro, trams and commuter rail, following an earlier launch on buses. The service now accounts for more than half of all pay-as-you-go journeys and has become a global showcase for the technology.