Mastercard's CEO champions the standards that pressure PayPal
As if picking up a baton from his counterpart at Visa, Mastercard's CEO sang the praises of a single "button" for online purchases, a stance that puts heat on online payment leader PayPal without the whiff of a direct attack.
Visa and Mastercard are using EMVCo's Secure Remote Commerce (SRC) Framework to standardize and fully tokenize card not present payments, a concept that American Express also supports.
The card brands say this standard will create a single a universal payment experience that's similar to plastic card usage in stores — a concept that is similar to, but separate from, PayPal's longtime business model.
"The bottom line is the EMVco framework will bring the benefits of standardization and interoperability for consumers, merchants, acquirers and issuers," Ajay Banga, Mastercard's president and CEO, said during Wednesday morning's earnings call.
Banga provided a bit more detail on the single button, saying some elements could show up in the market this year, with a more vigorous push to issuing banks in early 2019.
It's unclear how the single button would impact existing online payment brands such as Masterpass and Visa Checkout, since both card networks say they are dedicated to innovating and differentiating on digital payments technology while at the same time supporting a simpler more universal experience at checkout.
"Similar to the in-store world, you'll have the single terminal, along with offers and programs and other features," Banga said.
Banga did not mention PayPal during discussion of the single button, and praised Mastercard's collaborations with PayPal in other areas. That sounds a lot like Visa CEO Alfred Kelly, who also recently devoted time on his company's earnings call to promote the SRC-driven online standard while complimenting PayPal as a partner.
But the single button provides potential competition for PayPal given the card networks' scale. Thus far, PayPal has said it supports tokenization and improvements in user experience across all online payments, but has also positioned the card networks' single-button stance as an iteration on their branded digital wallets.
Both Visa and Mastercard say the standard will reduce pressure on merchants to figure out how to support different online payment systems.
That's necessary for both brands to win share of a rapidly expanding online payments market—e-commerce payments are growing at about 25% per quarter, Mastercard reported Wednesday.
"If you go to merchants with each wallet to connect with them, it's a nightmare," Banga said. "You want to make it simple with one checkout button."
For the quarter that ended March 31, Mastercard reported earnings of $1.5 billion, or $1.41 per share, compared with $1.1 billion, or $1 per share, for the first quarter of 2017. Thomson Reuters analysts had projected earnings of $1.25 per share. For the quarter, revenue was $3.6 billion, up 33% from $2.7 billion in first quarter 2017.
Strong economies in almost all of Mastercard's global markets are contributing to double digital growth in volume and transactions. "There's been good overall growth, but we're also watching central banks as they evaluate the potential to normalize monetary policy by reducing fiscal stimulus," Banga said.