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Global payments company MasterCard has introduced a new programme called Commerce For Every Device which will allow products such as car key fobs, wearables, and fashion accessories to be converted into a payment device. With this, the company is pushing digital payments in the Internet of Things space.
MasterCard has partnered with General Motors, wearable technology company Nymi, smart jewelry company Ringly, Bluetooth locator TrackR and designer Adam Selman for the programme. Users will have to buy a fitness tracker, ring or other connected devices from these companies and MasterCard will enable payments over them. Here’s a video which sort of explains how the new programme could work:
From the video, MasterCard will enable tap-and-go payments on a connected device and it looks like it will need specialized POS terminals for the same. However, the company does not mention what technology it will use for such payments. Usually for tap-and-go payments, companies and banks use NFC technology or a combination Bluetooth and sound (as in the case of iKaaz’s Mowa).
MasterCard did mention that it has working with chip makers Qualcomm and NXP to develop technology to enable secure payments. It added that Commerce For Every Device is an extension of its MasterCard Digital Enablement Service (MDES) and the Digital Enablement Express (Express) program. The MDES program provides tokenization services for existing cards using MasterCard. In tokenization, a card number is replaced with an alternate number as a token which is stored in a database to enable secure payments. So that means that you’ll have to link your existing debit/credit card to the devices.
MasterCard’s programme could significantly improve how banks can use connected devices for payments. However, as we mentioned MasterCard does not mention what technology it uses for this. If it does use NFC technology, it might find regulatory relief with the Reserve Bank of India which had earlier relaxed norms for NFC card payments. Although it remains to be seen what view the regulator will take of payments over connected devices.
It’s also worth noting that earlier this year ICICI Bank and tech Mahindra launched a service called ‘Tap n Pay’ which would enable NFC payments inside an organization. Currently, the solution is being offered at large campuses of corporate offices and employees would have an NFC sticker on their company ID cards which would allow them to make payments at cafeterias. It would be great to see this extended to other public services as well and lead to greater adoption.
– Earlier this month, Visa along with ICICI Bank allowed users to make cashless payments from their smartphones at physical stores via the Pockets app. The feature was been enabled by Visa’s new mobile payment solution mVisa. Users can make payments from the app by simply scanning a mVisa Quick Response (QR) code at a merchant location without swiping the card.
– Similarly, digital wallet Paytm launched QR code based payments in the app, which can be used by shopkeepers or service providers in order to accept digital payments.