MasterCard is adapting its rewards technology to better suit a world that's swimming in smartphones and abundant in app developers.

“Mobile wallets are starting to become more commonplace. It may not be using mobile as a payment devices, because acceptance [has yet to develop], but it can be about having a mobile app where a consumer can actually engage a rewards program,” says Chris Bond, group head of global markets for MasterCard.

The Purchase, N.Y., card network's new technology makes it easier for consumers to engage rewards programs that can be tailored by merchants or issuers through the use of data management, and delivered quickly on mobile devices or online, Bond says.

“As technology is advancing we recognized an opportunity to complement our data and platform capabilities through relationships with external partners,” he says. “The maturation of the Web and the ubiquity of e-commerce in our lives today has opened up all sorts of new ways to redeem rewards.”

MasterCard is offering developers the use of an improved version of its application programming interfaces (APIs), or software tools that can integrate MasterCard's network with other technology. These APIs combine with rewards programs hosted outside of MasterCard by proprietary or in-house providers.

"We have gone through a complete replatfoming of our rewards technology to make it more flexible because our bank partners have asked us to bring in other content," Bond says.

MasterCard is in discussions to partner on the delivery of special offers, Bond says. “The [API rewards link] could also work for a merchant that has a co-branded card with a bank," he says.

MasterCard is expanding the services it wraps around payments, in an attempt to lure merchants and issuers in a crowded market. The card network is also dabbling in wearable computing such as Google Glass, and is developing a mobile app that allows consumers to choose among multiple supported mobile payment options at the point of sale. MasterCard is also testing a process for ordering items in a store by scanning a QR code with a mobile device.

APIs are seen as a way to for payments companies and developers to quickly support new functions, particularly as mobile payments expand. Monitise recently released cloud-delivered technology that allows financial services clients to build an integrated suite of mobile payments and banking. Stripe has built is business on supporting other companies through software tools, and PayPal is improving its own version of this strategy through its purchase of Braintree.

“APIs and open platforms are becoming increasingly popular, not just with the payments networks but also even with the individual banks and payment service providers,” says Zil Bareisis, a senior analyst at Celent.

APIs can add intelligence to card platforms and extend capabilities associated with a card, Bareisis says.

“For example, a card transaction might trigger another event, such as offer delivery or redemption, receipt emailing, etc.,” he says. “Open platforms and APIs help foster innovation by inviting third parties, such as customers and independent developers, to build on top of the core platform capabilities.”

However, it is vital for the API provider to keep up with the needs of developers. One former MasterCard partner, PaidPiper, severed its reliance on MasterCard APIs ahead of its May product launch after finding it needed more flexibility. 

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