Small business online service provider Web.com has incorporated MasterCard's digital wallet, MasterPass, into its offerings, enabling MasterCard to dramatically and quickly expand MasterPass' merchant base.
"It's a huge milestone in the launch of MasterPass. It will completely legitimize the wallet in the marketplace," says Michael Cyr, group executive for U.S. customer delivery for MasterCard.
There are "tens of thousands" of merchants that are now live with MasterPass as a result of the partnership, Cyr says. MasterCard had about 160 merchants live on MasterPass before the Web.com deal.
"This drives scale to our MasterPass acceptance literally overnight," Cyr says. "The first question we get asked is how many merchants do you have."
MasterPass enables online and mobile payments from any type of card. At the point of sale, MasterPass can support browser-based payments and will add NFC and QR code payments in 2014.
For Web.com's merchants, the deal is a chance to upgrade the payments functions tied to online and mobile shopping for a variety of card types.
"Most businesses struggle with how to improve online conversion," says Jason Teichman, Web.com's chief marketing officer, adding most small businesses do not have a mobile wallet. "We have configured the wallet for the small businesses. They don't have to do any work."
The partnership will help Web.com's merchants, which received MasterPass for free, establish a straightforward payments process, says Teichman. Consumers can use MasterPass at Web.com merchant clients by enrolling on MasterCard's website or by clicking on the 'buy with MasterPass' button when checking out.
"Not only does it reduce the number of steps at checkout, it also reduces abandonment associated with credit cards," he says. "You want to avoid any extra work that a customer has to do to buy something, and avoiding them having to figure out where they put their credit card before making a digital payment is a good step."
MasterPass went live a few months after Visa launched its V.me digital wallet, which is focused on e-commerce sales.
"This [MasterCard/Web.com] deal reinforces the major card brands' effort to provide registration services across their issuer bases," says Richard Crone, a payments consultant, who says some e-commerce sites require more than 20 steps to execute a payment. "One of the problems with e-commerce sales today is the friction. The closer you can get to one click, the better."
Embedding a mobile wallet inside Web.com should help consumer adoption of mobile commerce, says Phil Philliou, a payments consultant.
"One of the big issues with shopping on a smartphone is there's high abandonment, and one reason is payments," he says. "This solution makes it easy. You press a button."
Correction: This story was updated to provide a correct timeline for MasterPass' support of NFC and QR code payments.