THE FUTURE IS NOW - WordPress.com...MC Digital payments: any payment initiated thanks to a card number stored on any device (i.e. Any card payment not initiated by a plastic card interacting
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THE FUTURE IS NOW THE MASTERCARD DIGITAL PAYMENTS STORY 25 May, 2016 DIGITAL PAYMENTS EUROPE
There are two rapidly evolving trends in mobile payments...
1. Statistica: Smartphone penetration amongst mobile users worldwide 2014-2019, link to website2. International Telecommunications Union, 2015, link to document3. Juniper Research, link to website
The growth of
3.2e- and m- commerce:
internet users in 2015 globally vs 400 million in 20002
82%of Europe’s population in 20152
The number of mobiles
2.7billion
is increasing exponentially:– and within this smartphones –
in the world by 20191
smartphone users
billion
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Presentation Notes
We are in the midst of a dramatic, global transformation in consumer behavior. What is changing is nothing less than how consumers interact: with their families, their friends, their communities – and also with merchants. This transformation is due in large part to the continued adoption of connected devices.
...and connected devices are changing each step of the purchase process...
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We are moving to an “internet of things.” Connected devices have moved us into a connected digital environment, where not only everything, but everyone, will be connected. And these fundamental changes in how consumers interact and use these smart, connected devices – for research, or communication or consuming media – will also transform how they transact. And to address this shift to digital, shopping and payment experiences need to evolve as connected devices provide more opportunity for engagement – and commerce – before, during and after a purchase.
MC Digital payments: any payment initiated thanks to a card number stored on any device(i.e. Any card payment not initiated by a plastic card interacting with a terminal)
of card payments are expected to be digital by 202038%
Digital card payments
Source : Based on Industry Data & MasterCard Internal Data
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Clearly, there are plenty of new opportunities to displace cash while reaching new merchants and consumers given the continued shift to a more digital society. By displacing cash and reaching new merchants and consumers, we’ll also secure our position in the digital future in a world where competitors are vying for greater control.
By embracing mobile devices and always-on connectivity, the boundaries between the physical and digital worlds are becoming blurred.
Consumers want to use their smartphones for everything including payments
Expect a unified experience wherever
and whenever they buy
Want to use their favourite connected devices to browse
and buy
Routinely choose to browse in-store and
buy online – and vice versa
Consumers:
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Convergence is radically altering the day-to-day shopping experience, and habits, of consumers. Now, in-store and online lines are blurring, if not already gone.
of our solutions with an array of technologies designed to address everyone’s payment needs
sees
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We’re transforming the way people safely shop, sell and send & receive money Our Vision is to Build the Operating System (O/S) of Digital Commerce, and we’re leading the way towards our vision of a world beyond cash. Safety and security remain paramount, and we’re making digital transactions more secure than anything we can do in the physical world. In the midst of this digital revolution, we’re helping to transform any connected device a consumer may have into a commerce device – to make and receive payments. This allows us to deliver even more compelling consumer experiences. MasterCard brings it all together to provide value to all stakeholders — consumers, financial institutions, merchants, governments, digital giants and telcos.
To connect consumers, merchants and issuers with safe, simple and smart interoperable payment methods they can use with confidence for both remote and in-store transactions.
MasterCard’s digital convergence brings transformational change to payments, fulfilling consumer demand for a unified shopping experience. With digital convergence solutions, that combine in-store and remote payments, consumers can shop wherever and whenever they want, and with their preferred device.
What is digital convergence?
ConvergedRemote
In-store
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Digital convergence in payment means the combination of remote and in-store payment happening with the same device, i.e. consumers can make an e-commerce purchase on their mobile as well as make contactless in-store payments with the same device.
MasterCard Digital Payments – how does it fit together?
In Store
Digital payment
VAS
Browser e-comm
Mobile NFC
Bill payments, mobile top-up, P2P,
In-App
QR-code
Digitize cards…into mobile devices …for Payments
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Let’s see how this all fits together. Starting from the top, the consumer currently has a bank account with physical cards attached to it that he or she can use for contactless cards payment in a store or browser-based e-commerce payments. This type of transaction can be secured by a solution called MasterCard SecureCode that we will explain later on. To make secure mobile payments, MasterCard is offering a solution named MDES (MasterCard Digital Enablement Service), which means your primary card number (PAN) is replaced by a token (this is called tokenization) and then this number can be digitized into a mobile wallet in a connected device (digitization). Mobile payments can be deployed in different ways. Card details can be stored in the SIM of the phone (SIM SE), in the handset itself in a secure element (eSE) or they can also be stored in the cloud. This is what we call a cloud-based payment. The MasterCard Cloud Based Payment solution is leveraging HCE technology (Host Card Emulation). With your digital card you can make different types of payments: e-commerce with MasterPass, contactless (mobile NFC) payment in a store, in-app payments leveraging Digital Secure Remote Payments (DSRP). You can also make a QR-code based payment with MasterPass leveraging DSRP, or other type of payments, like bill-payment, mobile top-up or person to person payments. To authenticate your payment transaction, different authentication solutions are available such as biometrics, PIN-code, screen-unlock or in case of some transactions no authentication is needed, e.g. contactless transactions. On top of payment functionalities, issuers can leverage other MC assets to add extra services, like rewards & loyalty programs, the possibility for consumers to set alerts and control the way they transact. Issuers can also give their consumers access to their transaction history and /or e-tickets in the palm of their hands.
MasterPass is a global interoperable platform, enabling digital transactions. It allows consumers to use any payment card or enabled device to buy the things they want quickly and simply, anywhere.
MasterPassTM
Eliminates the need to enter detailed payment and shipping information for every purchase
Simplifies the shopping experience
Consumers can pay with an enrolled payment card anywhere using any device
Card information and shipping details all securely stored in one place, easily accessible during checkout.
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MasterPass is a free digital wallet for consumers, which can be used to pay at any e-commerce merchant displaying the MasterPass checkout button. MasterPass helps consumers breeze through checkout confidently and conveniently, and delivers a better shopping experience, allowing them to get to what matters most, seamlessly and securely.
SECURE FASTThe NFC Controller in the mobile phone needs to receive instructions in order to activate the antenna and transmit the
payment details to the POS reader. Those instructions can come from one of four different domains as noted above.
Contactless mobile payments provide fast, simple and secure payment solutions. Different deployments have emerged.
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If you as an issuer decide to implement mobile contactless, then there are 3 potential deployment models. For all 3, you as a customer need an NFC-enabled phone, but we can say that by the end of 2015 every 4th smartphone will have that functionality and basically every newly sold device. As mentioned before, the first two solutions are based on a secure element in the hardware of the phone. In case of the first option, the SIM-Secure Element solution, the bank needs to partner with a telco, i.e. a Mobile Network Operator (MNO), so that they basically give some space on the SIM card of the mobile phone to the issuer in order to place the payment credentials into that secure element. The solution is well known, we have a number of programs working live in Europe. This solution is a very safe solution, however it means that the issuer needs to strike a deal with one or several MNOs in the country. From a consumer point of view, it also means they need to change their existing SIM-cards. The second option is when the secure element is in the handset itself, so not in the SIM. This means that the secure element is embedded in the handset by the handset manufacturer, so in this case the bank’s partner is not the telco, but the handset manufacturer sometimes called Original Equipment Manufacturer (OEM). The recently announced Apple Pay and Samsung Pay products are examples for this solution. It is also proven technology, there are several implementations done in Europe too, however the issuer is dependent on the handset manufacturer. Finally, the third solution is a software-based solution. In this case there is no secure element, card credentials are stored in the cloud. The bank is the owner of the relationship with the customer, the only dependency is that technology partners need to be involved to build the solution itself. This solution is leveraging HCE (Host Card Emulation) technology. This technology is only available in newer Android (KitKat v 4.4 or above) and blackberry phones. Thanks to this technology, you can use an NFC-enabled phone for a contactless payment without having a secure element built into the phone that gives a greater chance for this solution to becoming mass market. At MasterCard, we developed MasterCard Cloud Based Payments (often referred to as MCBP) based on this technology.
Apple is partnering with MasterCard and using MDES to support its Apple Pay service. MasterCard customers can use their Apple device:
•Contactless payments
•In-app payments
Apple Pay was launched in the US in October 2014 and in the UK in July 2015.
APPLE
MasterCard Digital
Enablement System
(MDES) provides
tokenization and
digitization of
consumer’s payment
credentials.
Supported by MDES
Presenter
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There is one use case of MDES that is already live in the US since October 2014 - Apple Pay. MasterCard has worked with Apple using MDES to support its Apple Pay service. Apple Pay is offering secure contactless and in-app payments to consumers. In addition, consumers can authenticate their payment transactions with biometrics, i.e. fingerprint in this case. With a simple touch with your finger and a tap, you can make contactless purchases. This is also the same for in-app payments, you can use your fingerprint for authentication. Looking ahead - at the Mobile World Congress in March 2015, MasterCard unveiled Samsung Pay too, this is going to be first launched in the US as well. Similarly to Apple Pay, you can pay contactless and in-app.
Samsung Pay is a mobile payment solution that allows you to pay with a simple tap with your Samsung handset containing a digitized MasterCard card on a POS terminal.Samsung device owners can use their MasterCard credit, debit and select prepaid and small business cards from participating banks directly through Samsung Pay.“Samsung Pay is now available in the US to
MasterCard cardholders for everyday purchases.
Samsung Pay
APPLE
Supported by MDES
Presenter
Presentation Notes
There is one use case of MDES that is already live in the US since October 2014 - Apple Pay. MasterCard has worked with Apple using MDES to support its Apple Pay service. Apple Pay is offering secure contactless and in-app payments to consumers. In addition, consumers can authenticate their payment transactions with biometrics, i.e. fingerprint in this case. With a simple touch with your finger and a tap, you can make contactless purchases. This is also the same for in-app payments, you can use your fingerprint for authentication. Looking ahead - at the Mobile World Congress in March 2015, MasterCard unveiled Samsung Pay too, this is going to be first launched in the US as well. Similarly to Apple Pay, you can pay contactless and in-app.
MasterCard Cloud-Based Payments enable consumers to make contactless in-store transactions and secure online purchases using MasterCard DSRP technology.
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Presentation Notes
With MCBP you can make a contactless in-store payment with your mobile. In addition, MCBP also allows for e-commerce payment transactions (e.g. in app) with the help of MasterCard’s DSRP solution (Digital Secure Remote Payments). This means that with MCBP, you can have a converged payment experience, you can pay in-store and you can pay in-app with the same device.
