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Retail technology vendor innovation: MasterCard

What is MasterCard?

A global payments and technology company which sees its products used by 1.9 billion consumers in more than 200 countries, MasterCard says it handles approximately 2.5 million payments a second.

Like its competitors, the company is currently making a concerted push in the retail space, appointing engagement teams and launching products that fit with the requirements of modern retailing and consumer behaviour.

What’s new at MasterCard?

Andrew Key, head of acceptance and market development for the UK & Ireland at MasterCard, told Essential Retail that the payments world has recognised the retail environment, be it online or in-store, is where any new innovations related to its industry will be realised.

“Consumers are critically important, whether they’re walking around with a phone in their hand, a card in their wallet or a pocket full of cash – we want to provide cutting edge technology for them,” he explained.

“However, where the rubber really hits the road is the retail environment, so that’s a key driver behind our push. Clearly we are not alone, but we want to know how to tackle the latest challenges.”

One new product from MasterCard, which has been developed against a backdrop of a growing trend for alternative payment methods in retail, is MasterPass. The payment platform is scheduled to be live in 13 countries and in every continent by the end of 2013, and it is being marketed as a speedier way of making transactions across all channels.

Any brand of card can be stored within the platform, as can shipping addresses and billing details. It ensures that the steps of the traditional online purchase, where huge amounts of time can be spent form filling, can be averted, whether the transaction takes place on mobile, tablet or PC.

“Shopping carts are abandoned primarily because consumers are very turned off by the checkout process,” Key added.

“We’ve seen the growth of online being driven by mobile – it’s where the real growth engine is. When you consider the smartphone, the last thing customers want to be doing is filling in reams and reams of information; they just want to authenticate themselves, make another click and then be finished.”

At the recent World Retail Congress in France, MasterCard announced a tie-up with publishing house Condé Nast and its Wired magazine, which allows those browsing through November’s edition to scan product images and then purchase the item in question via MasterPass wallet.

In July, meanwhile, MasterCard announced MBNA as a partner and the company is confident that other banks and telecommunications firms will be following hot on the credit card company’s heels. Key also does not want to see a similar situation to contactless payment, where adoption is slow and the new technology takes five or six years to take hold in the retail space.

“It has to happen quickly and it will happen quickly.”

What makes MasterCard stand out?

Key is quick to admit that MasterCard is operating in a competitive marketplace, and he is aware that the mobile wallet platform revolution that is widely expected to manifest itself in retail payments next year is going to prove to be something of a battle between his company and the likes of traditional competitors Visa, American Express and China Union Pay, as well as Paypal, Google and emerging business Zapp.

“I think there’ll be a number of providers who as long as they recognise they need to meet the needs of the retail community and the consumers, will be the winners,” he noted.

“I don’t think there’ll be a sole winner – it’ll be those who can best continue to evolve the solution they provide to ensure it meets everyone’s needs.”

The head of acceptance and market development says that MasterCard is clear in its view that any new product development must be conducted bearing in mind retailers’ requirements to seamlessly transact with their customers across a plethora of channels.

“Some 85% of transactions across the world are conducted with paper – and it is this figure that is of interest to everybody because we believe making payments electronic is the future; it is where consumer behaviour is going; and it’s where we can drive efficiency or financial/social inclusion,” he asserted.

“We are humble enough to recognise that a person’s first thought when they wake up is not a burning desire to make a payment, but it might be a desire to go shopping – so our aim is to make sure when they do decide to go shopping it’s as easy and as safe as possible at point of payment.”

What the boss says…

Having attended the World Retail Congress in Paris in October, Key has comments from a number of the leading retail execs ringing in his ears, such as those made by Arcadia Group CEO Philip Green and J Crew boss Mickey Drexler.

One message that stayed with him is that, although green shoots are showing, the retail industry is still someway from talking about complete recovery. Too much has happened over the last five years, including changing consumer habits and new technology capabilities, for things to quickly return to the post-Lehman Brothers boom times.

“Retailers face massive challenges because of the way consumers are changing, for example moving effortlessly through the different channels,” Key noted.

“Consumer behaviour is evolving so rapidly that it’s hard for all of us to keep up, and from a retailer perspective it is hugely expensive to adopt new technology. It’s all so interconnected that investment needs to be made in the right areas, so whether it’s MasterPass or other products we are trying to lighten the load and do as much work as we can from the payment piece.”