MasterCard has just announced a new digital wallet service that it hopes will take the lead. The service, called MasterPass, evolved out of MasterCard’s PayPass system, which allowed cardholders to pay by tapping their card, phone, or key tag on the point of sale terminal rather than swiping a card.
MasterPass pushes the idea a little further in hopes of creating a more universal service – one that can be used with multiple payment types and in various locations. Customers can connect various forms of payment to their MasterPass account, including all of their credit and debit cards as well as mobile wallets created by individual banks and merchants. Once this digital wallet is loaded up with all of these payment options, it can be used to make purchases online or at physical stores.
The MasterPass system also offers the benefits that come with any digital payment service. The increased speed and convenience of cashless transactions is the big advantage, but consumers also benefit from the potential for loyalty programs and discounts, while merchants gain the advantage of collecting better data about who’s buying what, and when and where they’re buying it.
One scenario that MasterCard envisions involves customers using their phones to purchase items right from the rack at a store – the store would then ship the item to the customer. Customers would get the advantages of being able to see the item in person (and in the case of clothing, even try it on) but still avoid waiting in line at the store or having to carry their purchases for the rest of the day. While it remains to be seen if consumers will think MasterPass really provides something different from the other competitors in the digital wallet arena, scenarios like this do provide some interesting implications.