MasterCard gives festival-goers a taste of mobile payment
Sunday 14 August 2011
A group of guinea-pig festival-goers at the recent Isle of Wight festival saved themselves from long queues for the beer and masses of food that are generally consumed at a weekend-long festival.
Instead of the usual tokens in exchange for goodies, MasterCard was on hand to provide wristbands that revellers could load up with cash electronically and use to buy their food and drink with a quick swipe.
The festival wristband is just one example of what the "innovators" at MasterCard have been dreaming up. And MasterCard is still trying to find an easier, and secure, way for consumers to part with their money.
At MasterCard Worldwide's European head office – high above London in a Canary Wharf skyscraper – UK president Hany Fam is enthusiastically explaining how shoppers will soon be able to pay for anything they like by using their mobile phone and a wave of the bar code. MasterCard is providing the payments system that has allowed Barclaycard and mobile network operator Everything Everywhere (a merger of Orange and T-Mobile) to launch the UK's first full-scale commercial contactless mobile-phone payments solution.
Currently the system allows shoppers to use a specially enabled mobile phone to make low-value payments, below £15. This is already revolutionary, considering some people were struggling to come to terms with the end of cheques. But Mr Fam says the security needed is now in place "for you to spend £200 – you just enter a pin on your phone". So the £15 limit will soon be a thing of the past. MasterCard has already put in place the security and the technology and is just waiting for the market to catch up. Contactless technology is already up and running in a range of retailers and on London Underground.
There are more than 50,000 "Tap & Go" contactless readers at retail outlets in the UK. And mobile-phone technology allowing payments is not far behind. Mr Fam explains: "By next year, paying with this device will be the norm. The credit or debit card will soon only be a back-up. This is going to be the normal state of how we pay for things."
But does it all sound a bit too easy? What about identity theft, or hackers? If they can get to Sony gamers' accounts and Marks & Spencer, can't they get through this? But Mr Fam says: "We haven't been hacked in 40 years. We are more secure than the Government."
Despite the risks, paying for shopping with your mobile is only the beginning. Mr Fam predicts that in the future, person-to-person payments and transfers will be possible.
"It will take four years for this to become the norm. By 2015, 60 per cent of the population will have them. The phone companies will be doing their best to roll out this technology, and offering upgrades. Our role is enabling and making sure this technology is secure."
It appears the public could already be on board. A recent Barclaycard and Barclays survey found more than one in eight of us don't carry cash and half of us believe coins and notes will become obsolete.
Mr Fam is particularly proud of the Dublin research and innovation team that was behind the Isle of Wight wrist bands. He says: "We are developing all sorts of ideas. The wristbands can be developed to become an item to keep and use again, or as a memento – and this is just the beginning."
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