The next big idea for payments is ready to spring to life, and MasterCard wants to be there when it happens.
"We know there are a lot of talented and innovative people out there that want to build technology for mobile payments and other emerging payment products, but a lot of the [technology] assets [aren't accessible]," says Nicolas Dinh, vice president of the emerging payments team at MasterCard in Canada. "Developers can build on the assets that we have."
At MasterCard N>XT, a two day developers' event co-sponsored by CIBC and Rogers Communication, developers will use MasterCard's open application programming interface (API) and toolkit to build any type of app with a payment connection.
MasterCard had mixed results in the past when it courted developers with this technology. Paidpiper Inc., once the poster child for MasterCard's initiative to work with small developers, launched in April after distancing itself from MasterCard and finding alternatives to using its API.
At the N>XT event, MasterCard is open to the idea that it may not have a long-term relationship with participating developers, Dinh says.
"Our goal is to have a proof of concept at the end of the event," Dinh says. "The developers will go about finding ways to commercialize their ideas after the event, seeking partners that could include MasterCard or other funding."
The event is scheduled for September 28 and 29 at the MaRS Center in Toronto, and MasterCard plans to open registration this month. Winners will be chosen by a judging panel that includes representatives from Rogers, MobileSyrup.com, CIBC, Google and Relay Ventures. The panel will award three top prizes of $10,000 and access to senior technology executives to pitch their app idea.
In partnership with MasterCard, mobile technology company Xtreme Labs will create a resource portal and a workshop to teach developers how to leverage MasterCard's API.
MasterCard N>XT is the card network's first public developer's event, though the company expects to have events in other markets, Dinh says. MasterCard, of Purchase, N.Y., choose Canada because of the country's tendency to adopt new technology quickly, Dinh says.
Along with Australia, Canada is often an initial market for new mobile payments technology. Canada was the second market for MasterCard's MasterPass digital wallet, and in 2012 MasterCard's mobile preparedness study ranked Canada No. 2 behind Singapore as the market most prepared to adopt mobile technology.
"Canada is a great market, not just for technology adoption rates, but a great place for bright and talented developers," Dinh says.
Other companies are using developers' events, often called hackathons, to cultivate new payments technology. Microsoft recently conducted #DigitalWalletFoundry in London to build payments technology off of Microsoft's SEEK Commerce Platform.
PayPal is also conducting a series of contests, called Battle Hacks. The eBay subsidiary is holding events in Berlin, New York, Tel Aviv, Miami, Moscow, London, Seattle, Barcelona and Washington, D.C. The top team from each city will participate in a final event in the San Francisco area, with the winner receiving $100,000.
"We're in an environment where everyone wants new ideas, and ideas they can bring to market quickly," says Andy Schmidt, a research director at CEB TowerGroup.
There aren't detailed numbers on the actual yield of hackathons, but the events provide a view into the ideas and methods of developers, Schmidt says.
"You can see how people work under pressure," he says. "It's a nice indication of what they will be like to work with on the product development side if their ideas get brought to market."