Mastercard expands Masterpass to include in-store payments, first arriving on Android devices in the US this month, unveils API for banks and other partners
Julian Chokkattu / Digital Trends :
Context & Ripple Effects
This move caps a two-year build-out of Mastercard's tokenized-payment footprint: the network had already pushed credentials beyond the card into smart rings, car keys, and other gadgets slated for 2016, and extended its Samsung Pay partnership across Europe. What changes now is that Masterpass stops being an online checkout button and becomes an in-store capability, launched first on Android in the US.
The API is the strategic half of the announcement: by letting banks and partners integrate Masterpass themselves, Mastercard turns its own customers into the distribution channel rather than building a consumer wallet alone. The months that followed validated the approach — a PayPal deal to accept MasterCard mobile taps in stores and the later linking of MasterPass into Android Pay, Samsung Pay, and Microsoft Wallet show the network choosing interoperability over a walled garden.
First-order effects
- US Android users gain in-store Masterpass payments this month, while banks and partners get an API to embed the service directly into their own apps instead of routing customers through Mastercard's front end.
Second-order effects
- Rival wallets and processors are forced toward interoperability: PayPal's subsequent agreement to share data on MasterCard mobile tap transactions shows that once the network opens its rails, even competitors plug in rather than build parallel acceptance.
Third-order effects
- If the pattern holds, card networks compete less on owning the consumer wallet and more on supplying tokenized credential infrastructure to whoever holds the customer relationship — banks, device makers, and even former rivals — shifting leverage to the network that makes its rails the easiest to embed.
The trend: Card networks are repositioning from closed proprietary wallets to interoperable tokenized payment rails distributed through banks, device makers, and third-party wallets.