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

With E-Commerce Skyrocketing, Tokenized Transactions Expected to Soar, as Well

NFC TIMES Exclusive Insight – As more consumers buy online, and to a lesser extent use mobile wallets for in-store purchases, because of the coronavirus pandemic, tokenized card transactions are expected to increase dramatically.  

Software-as-Service Platforms for Transit Agencies Begin to Support Open-Loop Payments

NFC TIMES Exclusive Insight – In what is believed to be a first, a transit agency in Europe plans to accept contactless credit and debit cards using a third-party software-as-a-service platform this summer, UK-based platform provider Masabi told NFC Times, although the company declined to name the agency. The project is expected to begin as a pilot.

Apple Launches Overdue Octopus Payments Service in Hong Kong, as It Continues to Seek More Transit Applications for Wallet

NFC TIMES Exclusive Insight – Apple today finally launched its Octopus transit payments service in Hong Kong on Apple Pay, nearly a year after the service was originally announced and more than two years after rival Samsung introduced a similar service in the market.

Mastercard: Contactless Payments in Europe Approach 80% of Card Transactions; Pandemic Causes More Consumers to Shun Cash

NFC TIMES Exclusive Insight – While contactless payments in Europe were already commonplace and continue to grow, the Covid-19 pandemic has created even more interest in the technology among consumers, according to a report released Thursday by Mastercard. The report includes a survey showing that consumers in eight major European markets say they use NFC-enabled smartphones and wearables for a combined 32% of all contactless transactions, a spokeswoman confirmed to NFC Times.

UPDATED: Ohio-Based Transit Agency Group Planning to Enable Mobile Ticketing Through Uber App

Jun 3 2020

NFC TIMES Exclusive – A consortium of 13 small and mid-tier transit agencies in Ohio and Northern Kentucky plans to enable customers to buy public transit tickets directly in the Uber app as early as this summer, following two other U.S. transit agencies, in Denver and Las Vegas, which have already integrated with Uber.

Samsung Details Planned Mobile-Money Service as It Seeks to Keep Pace with Rival Apple Pay

NFC TIMES Exclusive Insight – Samsung offered more details today about its Samsung Money debit card and “mobile-first” money management service for its Samsung Pay app, which it plans to launch in the U.S. this summer with personal finance fintech SoFi. Samsung had disclosed plans for the new service earlier this month.

Networks: Contactless Transactions Soar as Pandemic Takes Toll on Cash

NFC TIMES Exclusive Insight – In announcing their respective quarterly results this week, both Visa and Mastercard, as expected, discussed the major disruption that Covid-19 is wreaking on the payments business. But they also noted that there is one unexpected victim of the pandemic: cash.

Prompted by Pandemic Fears, Last of Australia’s Big Four Banks Ends Apple Pay Holdout

May 12 2020

NFC TIMES Exclusive Insight – Citing the increased demand for cashless payments because of the Covid-19 pandemic, Westpac today became the last of Australia’s big four banks to adopt Apple Pay, ending a four-year holdout that had lasted months, even years longer than its major rivals.

Insight: MaaS Backers Believe New Mobility Platforms Could Help Transit Providers Win Back Their Customers’ Trust

NFC TIMES Exclusive Insight – With Covid-19 lockdowns causing mass transit ridership in many cities to virtually fall off a cliff–with such cities as London, New York and San Francisco reporting drops of more than 90%–transport providers worry that some riders may not come back, even after the pandemic ends.

In-Depth: Government Regulation of Mobility-as-a-Service Seen as Necessary to Encourage Widespread Adoption

Apr 16 2020

NFC TIMES Exclusive Insight – Government legislation will likely be needed for widespread adoption of Mobility-as-a-Service, or MaaS, to occur, according to UK-based Juniper Research, which believes that the regulations will be necessary to force MaaS providers, including transit service providers, to work together, as well as to persuade users to get out of their cars to cut carbon emissions.

Apple Pay Expands Support for Interoperable Closed-Loop Transit Cards in China, Though Not First NFC Pays Wallet to Do So

NFC TIMES Exclusive Insight – Apple on Wednesday expanded support for closed-loop transit payments across China, incorporating China’s T-Union interoperable transit cards in its Apple Pay service.

Insight: Virus Adds Urgency to Increasing Contactless Limits but Won’t Necessarily Drive Growth in Acceptance

NFC TIMES Exclusive Insight – While the Covid-19 virus outbreak is building awareness for contactless and NFC payments and is accelerating the increase in already low contactless transaction limits in Europe, it remains to be seen how much it will convince more merchants to accept contactless in the U.S.