Daily Insight | Nick Holland | August 28, 2012
MasterCard is touting its digital wallet as the next big thing, and it has taken the next big step to promote its services; the company has signed a deal with U.K. operator Everything Everywhere to support accelerated adoption.
The BBC is reporting that MasterCard anticipates this partnership will give it an edge over others developing rival services such as O2, Barclays, Visa and PayPal. MasterCard hopes to tap into Everything Everywhere’s customer base, which tops 27 million. The two companies agreed to a five-year partnership, and together they will provide new payment options. The first plan of action is to develop a service for users to pre-pay money into an account to spend via NFC-enabled devices. From there, MasterCard anticipates developing new features such as in-store payment options drawing funds from a user’s bank account and P2P money transfers.
Yankee Group Principal Analyst Nick Holland comments
“It is somewhat astonishing that mobile operators and card brands are still considering mobile payments to be an area for competitive differentiation when all the consumer wants is a digital wallet experience that is no different to their actual wallet. Meaning: accepting all card brands and working everywhere. The key to this will be multiple operators working collaboratively with multiple banks and card brands. Unfortunately, this also means little scope for differentiation and diminished revenue generation opportunities. However, to not give the consumer the experience that they already have with plastic cards is to invite failure. Mobile payments will remain problematic for card brands and MNOs until they finally realize that it is all about the consumer and the merchant, not themselves.”
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