EcommerceBytes-NewsFlash, Number 3009 - February 26, 2013     4 of 4

MasterCard Unveils MasterPass, New Digital Payment Service

By David A. Utter

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The advances in ecommerce and the world of mobile devices continue to present customers additional ways to shop beyond the traditional PC. During the 2012 holiday shopping season, 63 percent of shoppers used multiple devices to help with their purchasing decisions.

But while those shoppers looked for product details or price comparisons, payments weren't really on the mobile menu. It's an area where MasterCard is making a new effort at expanding and claiming a part of the nascent digital payment market.

MasterCard announced MasterPass at the Mobile World Congress, positioning it as a digital service that will unify ways consumers can make payments. MasterPass is a continuation of the PayPass Wallet that MasterCard initiated in May of last year.

The company's Ed McLaughlin, chief emerging payments officer, said MasterPass will "bring together all of the ways we pay for things." This can be a typical plastic card as well as a digital wallet.

Other companies like PayPal and Google have tried driving the digital wallet concept. Digital wallets haven't quite grabbed the public consciousness yet for various reasons. MasterCard, as a known financial entity with global banking connections, approaches digital wallets from what could be a stronger starting point.

MasterCard tapped into those connections with its MasterPass announcement. The company said MasterPass would be available at more than 5,900 merchants. For customers, it will mean having access to several features.

One of those will be the aforementioned digital wallet, a product that banks, merchants, and other MasterCard partners can offer. This open wallet allows consumers to store MasterCard cards along with other branded credit, debit and prepaid cards in a secure environment.

For those with an ecommerce interest, MasterPass provides storage of payment and shipping information. Customers use this during the checkout process instead of needing to enter it each time. This may or may not have a lot of appeal with online sellers, who may already have such functionality in place with an existing payment process.

MasterCard said there were no fees for consumers to use MasterPass, and there are no fees for merchants to use MasterPass at this time. However, merchants may incur costs to implement MasterPass on their website or apps if they use third-party resources to help them. MasterCard also told merchants MasterPass can help them increase conversions: "Pain-free checkouts help reclaim the 24% of sales lost to a checkout process that was too confusing or took too many steps."

Whether ecommerce will be a focal point or a side concern for MasterCard with its MasterPass should be seen in the coming months. The potential benefit of value-added services from MasterPass, like loyalty programs or "Priceless" offers, may be the way MasterCard sells this to online merchants.

About the author:

David A. Utter is a freelance writer based in Lexington, KY. He has covered technology topics from search to security to online business and has been quoted in places like ZDNet and BusinessWeek. He considers his appearance on NPR's "All Things Considered" with long-time host Robert Siegel a delightful highlight. Send your tips to and find him on Twitter @davidautter and on LinkedIn.

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