MasterCard acknowledges it needs Apple to bring NFC payments into the mainstream

Posted:
in iPhone edited January 2014


Credit card card companies are working to push consumer payments away from plastic cards and into more secure electronic forms, but a MasterCard representative has acknowledged that getting NFC into Apple's iPhone will be critical in advancing the technology into the mainstream.



In an interview with Fast Company , Ed McLaughlin, MasterCard's head of "emerging payments," noted that "we're rapidly moving to a world beyond plastic," but added that progress in rolling out electronic payments has incremented at a slow pace.



Electronic "tap to pay" systems typically rely on NFC (near field communications), a standardized technology that can enable smartphone users to bring their NFC-equipped phone into proximity with a contactless payment device, such as at a checkout line or on a vending machine or transit turnstile.



MasterCard has worked to roll out its own PayPass system using NFC-equipped cards, in tests that began nearly ten years ago in the US. The NFC cards include an embedded, unpowered chip read by an active reader, but popularity for the system hasn't been enthusiastic.



Visa has its own system it calls PayWave, which it also licensed to Google. At the end of 2010, Google announced NFC support in Android 2.3 Gingerbread, allowing developers to interact with static NFC tags similar to optical reading of barcodes.



The company also launched the Google Wallet initiative last summer, intended to enable NFC-equipped smartphones to make purchases at a variety of merchants as an alternative to carrying a credit card, working with both PayWave and PayPass.



Apple needed for Critical Mass



Austin Carr, who interviewed McLaughlin, noted in his report that in speaking to merchants who had installed Google Wallet devices, none could report that anyone had ever used the system, with one explaining that it was installed "because Google gave it to me."



Getting buyers to actually use NFC is, McLaughlin explained, "a combination of having a critical mass of the merchants, which is what you're seeing right now, and getting devices into the hands of consumers."



He added, "I don't know of a handset manufacturer that isn't in process of making sure their stuff is PayPass ready," and when asked if that included Apple, he backtracked, "Um, there are...like I say, [I don't know of] any handset maker out there. Now, when we have discussions with our partners, and they ask us not to disclose them, we don't."



When pushed to say whether "the contactless payments industry needs Apple to hit critical mass," McLaughlin answered, "Well, anytime someone with a major base moves forward, it advances what you're doing. So of course."



At CES earlier this month, Bill Gajda, Visa's Global Head of Mobile Product told Fast Company, "I can't tell you when Apple is going to put NFC in the next version of the iPhone, but we've had discussions with them around the PayWave standard and they've asked to look at our specification and certification process so that when they decide to do something those lines of communication are open."



Apple's electronic payments strategy yet to unfold



The report also noted that "Visa's hoping to make itself the go-to point for this solution, so 'handset manufacturers don't have to do a deal with 26,000 banks.'"



Unlike individual banks that issue cards through Visa, MasterCard or other credit card agencies, Apple has the ability to bill users' transactions to their own accounts, as it already does with iTunes and the App Store.



This could result in Apple becoming an alternative to MasterCard, Visa or eBay's PayPal for handling electronic payments outside of its own, broadening its relationship with customers outside of online and retail transactions to also cover their other purchases.



Google had originally negotiated to partner with eBay to handle its Google Checkout/Wallet service, but during negotiations with its PayPal executive Osama Bedier, Google offered him a job instead and abandoned plans to partner with eBay, using Bedier to build a competing system for Google instead, using his knowledge of eBay's future plans.



PayPal subsequently sued Google over misappropriation of trade secrets and breach of fiduciary duty, and banned Google Wallet as a form of payment on eBay.

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Comments

  • pika2000pika2000 Posts: 41member
    Need Apple? Personally, retailer support is more important. What's the point of NFC if I can only use it on certain few retailers, regardless whether I have an Apple device or not? Have everything, including public transportation, ATMs, vending machines, retailers, grocery stores, ticket booths, all use the same standard, then NFC will gain traction. Until then, it's easier to swipe my credit card.
  • splash-reversesplash-reverse Posts: 648member
    Quite readily agree to both of you. If Apple implement it then retailers have to provide it. Still, retailers need to follow McDonalds; always in the forefront. Maybe other American fast food joints, donut places and ice cream parlours need to take heed and follow. No, not the gym!



    Can't see Motorola or Samsung provide such an influence, despite their effort to win into people's heart and mind (see prev news).
  • rot'napplerot'napple Posts: 1,839member
    What?! This can't be done on the back of Samsung Galaxy and Tab alone???



    How would Apple people use the NFC... They're all waiting in some line, camping out with hours to go before the next release, right Samsung?!

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  • orlandoorlando Posts: 601member
    They also need carriers to agree. Right now AT&T, Verizon and T-Mobile are building their own competing NFC payment system call ISIS.



    Verizon has already allegedly blocked Google Wallet on the Galaxy Nexus.
  • ajitmdajitmd Posts: 365member
    <<<Google had originally negotiated to partner with eBay to handle its Google Checkout/Wallet service, but during negotiations with its PayPal executive Osama Bedier, Google offered him a job instead and abandoned plans to partner with eBay, using Bedier to build a competing system for Google instead, using his knowledge of eBay's future plans.



    PayPal subsequently sued Google over misappropriation of trade secrets and breach of fiduciary duty, and banned Google Wallet as a form of payment on eBay. >>>

    \t

    Sounds familiar?! Snake in the grass did the same to Apple with the iPhone.
  • rot'napplerot'napple Posts: 1,839member
    Quote:
    Originally Posted by AppleInsider View Post


    Google had originally negotiated to partner with eBay to handle its Google Checkout/Wallet service, but during negotiations with its PayPal executive Osama Bedier, Google offered him a job instead and abandoned plans to partner with eBay, using Bedier to build a competing system for Google instead, using his knowledge of eBay's future plans.



    PayPal subsequently sued Google over misappropriation of trade secrets and breach of fiduciary duty, and banned Google Wallet as a form of payment on eBay.



    Can't Apple lawyers just use this in courts over Google's Android and say to the court it is their "Modus Operandi"?

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  • andysolandysol Posts: 2,506member
    I think NFC would be cool on my phone- and I'd use it at grocery stores etc. where would I not use it? Anywhere id have to hand someone my phone (fast food or restraurants). That would be gross.
  • solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by pika2000 View Post


    Need Apple? Personally, retailer support is more important. What's the point of NFC if I can only use it on certain few retailers, regardless whether I have an Apple device or not? Have everything, including public transportation, ATMs, vending machines, retailers, grocery stores, ticket booths, all use the same standard, then NFC will gain traction. Until then, it's easier to swipe my credit card.



    Retailer support is more important than devices that can utilize it thus making the retailers investment worthwhile? It's the classic chicken and egg scenario that a great deal of technology but as stated in the article it won't become mainstream until there is a technology company with a great deal of mindshare and market presence to make retailers want to add NFC.
  • solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by Andysol View Post


    I think NFC would be cool on my phone- and I'd use it at grocery stores etc. where would I not use it? Anywhere id have to hand someone my phone (fast food or restraurants). That would be gross.



    You wouldn't be handing your phone over to anyone. NFC is quite good in making your accounts more secure than with plastic.
  • ugubserugubser Posts: 1member
    The first thing people have to realize is that PayPass and PayWave etc. have been around since 2005. There are two main factors why critical mass hasn't been reached: a) the merchants do not see a benefit in upgrading and in fact, it's only going to make their lives more complicated and b) credit card issuer pay a higher price for cards. So from MasterCards perspective, it's easy to say that we need NFC in the phones - but the merchant network is the real key here. If merchants really wanted this, they would have made the investment during the last 7 years. The way to get the merchants is to have a vehicle that can drive NFC type payments. As Japan, Singapore, Hong Kong, London and Australia have shown: such a vehicle is the public transport system.
  • pika2000pika2000 Posts: 41member
    Quote:
    Originally Posted by Orlando View Post


    They also need carriers to agree. Right now AT&T, Verizon and T-Mobile are building their own competing NFC payment system call ISIS.



    Verizon has already allegedly blocked Google Wallet on the Galaxy Nexus.



    More reason to stop supporting carrier-controlled phones. Yeah, it's sad seeing Google bowed down to Verizon for the Nexus, which is Google's own dev phone.
  • ajbdtc826ajbdtc826 Posts: 190member
    I'm gonna have my wallet wherever I go normally. I don't see it being any more convenient than using a credit card.



    The only places this would matter are at the beach, a pool, hockey practice, etc. but for 95% other times, the whole card-swipe is pretty good.
  • solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by AjbDtc826 View Post


    I'm gonna have my wallet wherever I go normally. I don't see it being any more convenient than using a credit card.



    The only places this would matter are at the beach, a pool, hockey practice, etc. but for 95% other times, the whole card-swipe is pretty good.



    So you're saying you have your phone with you more than your wallet so why not just use your phone for a more secure and protected transaction process?
  • correctionscorrections Posts: 1,142member
    Quote:
    Originally Posted by AjbDtc826 View Post


    I'm gonna have my wallet wherever I go normally. I don't see it being any more convenient than using a credit card.



    The only places this would matter are at the beach, a pool, hockey practice, etc. but for 95% other times, the whole card-swipe is pretty good.



    NFC could be useful if your phone integrated with purchases to keep you informed of what you were buying and giving you budgeting features. You could also stop carrying a Starbucks card, a Transit pass, and several credit cards, dramatically lightening your wallet.



    Apple offers a critical mass that can accelerate a number of enabling technologies. We'll see if the company sees NFC as profitable enough to enter. If it does, it could provide a lot of convenient features, such as being able to reload your transit pass from your account without dealing with a ticket machine -- you could do it through an app, or your company could recharge your account for you centrally.



    There's several things to be sorted out however, including getting everyone to use the same interoperable standards and accounting, which is one of the problems NFC is trying to address.
  • solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by Corrections View Post


    NFC could be useful if your phone integrated with purchases to keep you informed of what you were buying and giving you budgeting features. You could also stop carrying a Starbucks card, a Transit pass, and several credit cards, dramatically lightening your wallet.



    Apple offers a critical mass that can accelerate a number of enabling technologies. We'll see if the company sees NFC as profitable enough to enter. If it does, it could provide a lot of convenient features, such as being able to reload your transit pass from your account without dealing with a ticket machine -- you could do it through an app, or your company could recharge your account for you centrally.



    There's several things to be sorted out however, including getting everyone to use the same interoperable standards and accounting, which is one of the problems NFC is trying to address.



    I already lighten my wallet load by about 40 cards with CardStar. It's not perfect, for various reasons, but it's better than carrying 40 additional physical cards around with me.
  • apple v. samsungapple v. samsung Posts: 406member
    The google wallet that I have on my galaxy nexus is one of the biggest reasons i can not use the iphone. I love this feature its extreamly convient and fast(when the merchant knows what they are doing). I can not wait until the iphone supports this. Hopefully i would see it popping up at more then a half dozen places.
  • andysolandysol Posts: 2,506member
    Quote:
    Originally Posted by SolipsismX View Post


    You wouldn't be handing your phone over to anyone. NFC is quite good in making your accounts more secure than with plastic.



    So I go to Chick Fil-a and the NFC device is outside the drive through window? or there is one at every table at every restaurant. Just saying- you can't use NFC exclusively even if it was offered everywhere- unless you give your phone up at some point. Germs...
  • SpamSandwichSpamSandwich Posts: 24,700member
    Quote:
    Originally Posted by SolipsismX View Post


    I already lighten my wallet load by about 40 cards with CardStar. It's not perfect, for various reasons, but it's better than carrying 40 additional physical cards around with me.



    Same here. Love that app.



    As for all this near-field card business, I have no interest in it.
  • wurm5150wurm5150 Posts: 763member
    Quote:
    Originally Posted by pika2000 View Post


    Need Apple? Personally, retailer support is more important. What's the point of NFC if I can only use it on certain few retailers, regardless whether I have an Apple device or not? Have everything, including public transportation, ATMs, vending machines, retailers, grocery stores, ticket booths, all use the same standard, then NFC will gain traction. Until then, it's easier to swipe my credit card.



    Or it could make more retailers jump on the NFC bandwagon if Apple is in the game? Knowing that Apple users are willing spenders I wouldn't hesitate to join in if I were a retailer.
  • wurm5150wurm5150 Posts: 763member
    Quote:
    Originally Posted by SolipsismX View Post


    I already lighten my wallet load by about 40 cards with CardStar. It's not perfect, for various reasons, but it's better than carrying 40 additional physical cards around with me.



    Who the hell has 40 cards? (besides you)..
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