Beyond Apple Pay: MasterCard looks to Virtual Reality, Other Tech Innovations
Credit card giant MasterCard is banking on what it believes is an imminent surge in Australians adopting tap and go payments on their smartphones. It is, however, looking past the likes of Apple and Android Pay to figure out how such payments will work inside virtual reality, with artificial intelligence bots and the internet of things.
Garry Lyons, MasterCard’s global chief innovation officer, who runs its digital payments division along with its future-focused MasterCard Labs operations, visited Australian staff and clients last week as Australia and New Zealand Banking Group (ANZ) revealed it will be the first big bank to allow its customers to use Apple Pay.
The furor that erupted among some customers of the other banks was a clear indication that there is latent demand among Australians to begin using their phones to make payments, even though recent figures show that only 8 per cent currently have a digital wallet app installed on their phones. According to Mr. Lyons, usage of smartphone payments would take off as soon as more people were aware of it, and the service was shown to offer more than the alternative, plastic.
“A stat I use everywhere around the world is that 70 per cent of all MasterCard transactions in Australia under $100 are contactless payments,” said Mr. Lyons.
“For consumers now to decide they’re going to adopt mobile payments it has to provide them more value than what they are getting today with contactless cards … this could be something like the ability to leave your wallet at home, but we also need to think about what more we can do and what value can be added to the experience.”
Mr. Lyons pointed out that even though Apple Pay was making headlines now, other systems such as Android Pay would be equally as important to the future of payments infrastructure, due to the sheer number and variety of devices they would work on in comparison to Apple’s.
He said the work put in by payments companies to introduce global standards into the industry would be of immense benefit to technology companies.
“We want to support our consumers on all devices and have a global level of interoperability,” Mr. Lyons said. “We have to provide consumer choice with something like this – it shouldn’t be elitist, payments should be made available to everyone.”
THE FUTURE OF PAYMENTS
There is an increasing appetite for consumer-grade virtual reality, such as Facebook-owned Oculus Rift, which would completely immerse users in virtual worlds, where theoretically they may wish to make purchases.
Work on payments from sensors connected to the so-called internet of things may also be included, where in domestic terms, a fridge, for instance, could order and pay for more milk without human interaction.
“We have a theory within MasterCard that every connected device can be a commerce device, and we are going to deliver secure payments from it,” Mr. Lyons said.
“There will be occasions where it is better to order groceries from a screen on your fridge than going off to use a PC or another device, and similarly your car should become a commerce device, which conducts a secure payment at the gas station as you drive off.”
MasterCard, like many of the large banks, is also beset by a raft of emerging fintech start-ups, eager to gatecrash the potentially lucrative sector. Mr Lyons stressed that his company considered the fintech wave as an opportunity for collaboration rather than competition, and said this involved either acquiring start-ups, partnering with them or using their services.
“I actually came into MasterCard when the company acquired my start-up [Orbiscom] and I believe that we can add a lot of value to start-ups, but that start-up players in the fintech space can also provide a lot of value for us,” he said.
“We make investments in lots of start-ups, and will continue to, but every start-up is different and solving different problems with different skill sets … I truly believe that if we have good start-ups, then we will be working with better companies and that will be helping us and our customers.”