MasterCard is talking to Merchant Customer Exchange executives about what role the card brand could play in the retailers' CurrentC mobile wallet, but the card brand insists it is just an interested observer in the merchant mobile wallet venture.

With MCX completing a deal with JPMorgan Chase this week to link Chase users to the CurrentC wallet, MasterCard is examining whether its MasterPass digital wallet or other services could play a new role with the merchants, said MasterCard CEO Ajay Banga. The CurrentC wallet is still in testing, Chase expects to support it in mid-2016.

"MCX is interesting, but I haven't changed my previous opinion because I haven't seen anything roll out by them," Banga said Oct. 29 during MasterCard's third-quarter earnings conference call. "They are all large and useful merchants with whom we have relationships and work with, and we will see what happens when they roll it out."

Whatever Chase Pay does for CurrentC, the key will remain the consumer experience, Banga said.

"If the experience is clunky, they have to have a plan to solve that if it is not more convenient to use," Banga said.  

Any relationship between MasterPass and a third-party digital wallet would still invoke MasterCard's digital wallet fees, Banga said. "The fee is a policy of our company, and we are sticking with that policy."

While MasterPass has enjoyed steady growth into 24 markets and availability at 250,000 merchants, the card brand views digital payments as still in the early stages of adoption.

"You make progress by gaining chunks of merchants, or one-by-one … to build acceptance and day-to-day merchant usage," Banga said. "Don't judge MasterPass as a sprint, because building acceptance is more of a marathon with a cumulative effect."

MasterCard reported a net income of $1 billion for the third quarter, an increase of 9% over last year after adjustments for currency. When including a $50 million after-tax charge for the termination of a U.S. employee pension plan, income was reported at $977 million, or a 4% increase.

Net revenue, driven by cross-border volume and transaction increases, was $2.5 billion for the third quarter, a 2% increase over last year.

Still, MasterCard continues to navigate the uncertain waters of the global economy and absorbing the recent loss of the United Services Automobile Association portfolio.

MasterCard finds itself in a similar position to when it lost Chase a few years ago, as USAA similarly entered a deal with Visa Inc. USAA serves U.S. military members and their families.

"USAA was a long-time client and it was sad for us to lose them," Banga said. "We will still be doing some debit processing and rewards work with USAA."

The loss of USAA to Visa was based on more than just pricing, Banga added. "We win business and we lose some," Banga said. "This was one we couldn't win, and when we lost Chase a few years ago, we have rebounded from that."

To counter some of the revenue pressure from co-brand competition, MasterCard plans to forge ahead with its strategy to be seen as a provider of digital payment security.

MasterCard is positioning itself as a security vendor as much as a payments network provider in the future, going headlong into its Internet of Things project that makes any connected device a secure payment option. The concept takes the MasterCard Digital Enablement Program and the brand's Digital Enablement Express services to new levels.

This strategy indicates that MasterCard views security as much broader than keeping digital payments safe through tokenization. Selfie Pay, or facial biometrics, represents another security measure that MasterCard has recently launched.

"I am quite hopeful that safety and security will be a good way for us to grow," Banga said.

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