MasterCard is working on new mobile payments functions that give shoppers the choice between Near Field Communication chips and QR codes two mobile payments methods that have competed in the market and are typically treated as mutually exclusive.
"In the past, there was one way to pay. Now with the move to a digital world there will be a lot more ways to pay contactless or QR code, as well as other value," says Will Giles, a Toronto-based senior vice president of product management for emerging payments for MasterCard Inc.
MasterCard's new projects include a button on its mobile app that will give users the choice between NFC to execute a payment, or a QR code. Most prominent mobile wallets bet entirely on one of these technologies instead of the other. For example, Google Wallet and Isis rely heavily on NFC and do not provide an option for QR codes, whereas the successful Starbucks app asks users to present a code at the point of sale and does not provide an NFC option.
Another new MasterCard development will allow consumers to use QR codes to make purchases and have products shipped to their home.
"Imagine you are at a stadium and want to buy a sweater, but there is a line," Giles says. "You can tap a QR code on a poster [near the concession stand] to buy the shirt and have it shipped to your address."
Giles discussed these technologies during a mobile payments conference in Toronto operated by the Ontario Ministry of Economic Development, Trade and Employment .The two new products should be ready in the next 12 months, Giles says, adding the next step will be to recruit merchants and build the user experience.
Giles did not reveal a Canadian testing schedule for the QR code initiatives, but said the country provides a fertile ground for new payments innovation. Canada was one of the first markets to deploy MasterCard's MasterPass digital wallet, and MasterCard's PayPass has penetrated deep into the Canadian payments market, Giles says, adding 19 of the country's largest 25 merchants accept PayPass.
Canada, which scores high on MasterCard's mobile preparedness study, is also an attractive market for other payment companies, with uGenius, Stripe and Square all establishing a presence in the country in the past year.
These tech companies are attracted to Canada's smartphone-friendly culture, EMV-compliant point of sale infrastructure (which is NFC-compatible), and extensive IT industry, says David Wai, senior sector advisor at the Ontario Ministry of Economic Development, Trade and Employment. "Retailers and consumers are comfortable with contactless and mobile technology and are conditioned to use it," he says.
To further tap into the local talent base, MasterCard on Sept. 28 and 29 will host MasterCard N>XT in Toronto, a developers event co-sponsored by CIBC and Rogers Communication. Developers will use MasterCard's application programming interface to build payment apps. The event will be at the MaRS Centera technology collaboration facilityand winners will be chosen by judges from Rogers, MobileSyrup.com, CIBC, Google and Relay Ventures. Three winners will receive $10,000 and access to senior technology executives to pitch their idea. The event will include about two dozen teams of developers, Giles says.
"If you walk down the street here in Toronto, you'll see banks and telcos and IT companies, it's very easy to collaborate," says Todd Roberts, senior vice president of payments innovation and strategy for CIBC, which has adopted Rogers Communication's suretap mobile wallet and expects to team with other telecoms such as Telus and Bell in the next year on mobile payments. Such a team-up would cover more than 80% of the Canadian mobile market.
The bank is hoping to add marketing and loyalty programs through its work with telcos, Roberts said. "It takes a lot of work to get a credit card on a phone, but what comes next is most important," Roberts said.