Since its launch four years ago, Mastercard’s digital wallet Masterpass has been pushing ahead through integrations with big-name banks and merchants like Avis and J.Crew. Now it's going small with Masterpass’ new role as a one-click digital payment option at thousands of vending machines in 300 U.S. and Canadian cities.

Through a new partnership with mobile payment technology firm PayRange, Masterpass will become a checkout choice for consumers using PayRange’s mobile payment app to make cashless purchases at vending machines across North America beginning May 1, Mastercard said Wednesday.

The deal also aims to expand consumer usage of the vending machine mobile payments app developed by PayRange, a Portland, Ore.-based company founded in 2013, that leverages a Bluetooth-enabled dongle built into machines that connects to a user's app.

Bloomberg News

On signs posted on participating vending machines, PayRange encourages consumers lacking cash to make a purchase by downloading its app on the spot and entering specific card details. PayRange’s new deal with Masterpass will cut steps by eliminating the need for customers who’ve enrolled in Masterpass to enter card details again.

Adding Masterpass also could significantly enhance usage of PayRange’s vending machine app, according to Betty DeVita, Mastercard’s chief commercial officer for Digital Payments and Labs.

“Vending machines are an interesting vertical market to drive usage of Masterpass, because of the cadence and frequency of people who pass these machines regularly in hospitals, schools and work campuses,” DeVita said. More than 90% of vending machine purchases involve cash, but availability of bills and coins often limits purchases, she added.

Commercial laundromats also are an area ripe for digital disruption, DeVita said.

“Where laundromats add mobile payments, it expands use of laundry machines when people aren’t limited by the number of quarters in their pocket,” she said.

The Masterpass partnership with PayRange is an example of Mastercard's strategy of enabling consumers to register for Masterpass directly through the merchant, DeVita noted.

Mastercard’s multi-pronged campaign to promote Masterpass also involves encouraging consumers to enroll in Masterpass through their bank, but individual bank support isn’t required for consumers enrolling in Mastercard through PayRange.

“We’re working on multiple fronts to promote Masterpass—the long game is through banks, but the short game is through direct enrollment with merchants,” DeVita said.

Close to 300,000 merchants globally now accept Masterpass, either through their websites, apps or in stores, or combinations of those channels, DeVita said, and adding vending machines should help to accelerate usage.

“We’re working to achieve scale with Masterpass through many use cases, but the unattended payment area is an outstanding area because it accomplishes the goal of eliminating the need for cash and increasing both convenience and security in one step,” DeVita said.

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