MasterCard Mulls the Results of Chip and M-Commerce Pilots

MasterCard is evaluating the next step for its contactless payment program following the conclusion of its PayPass test using a chip-based card in Orlando and as it nears the conclusion of a test involving the use of cell phones as a payment device in Dallas. The card company is expected to continue with the concept of contactless payment–allowing multiple payment devices beyond cards–but how it will proceed is still being evaluated. The Orlando program involved 60 retail locations and 15,000 cardholders from three major card issuers. While the test concluded at the end of September, participating merchants will continue to accept the cards as credit card payments pending a decision on the future of the program. A final evaluation looking at the operability and reliability issues, as well as merchant and consumer acceptance, is expected in the fourth quarter. Meanwhile, the Dallas mobile-commerce test with cell-phone maker Nokia is expected to conclude at the end of this calendar year. The Dallas program began with a couple hundred Nokia employees using their phones to make purchases in their corporate cafeteria. In May, the program expanded to include 10 retailers located within one mile of the Nokia headquarters and also included between 500 and 1,000 volunteer participants who were not employees. While the Orlando program involved a card that was fitted with a contactless chip and radio-frequency circuit that could transmit payment data when waved near a point of sale terminal, the Dallas program put the payment information in a cover that fits over the telephone. Consumers making purchases tap their phone over the POS device and the credit card data are transmitted. Most of the participants in the pilot were given the phones, but anyone who already had any of three particular Nokia models could use their existing phones. “It was designed so you could be talking on the phone while making a purchase, say 'excuse me,' and tap your phone over the device and then go back to your conversation,” says Betsy Foran-Owens, MasterCard vice president of product services. Most of the participating retailers are quick-service establishments, including fast-food restaurants, movie theaters, convenience stores, and gas stations, some of which had not accepted credit cards before. Ultimately, MasterCard wants to set up a program so that card issuers and consumers can choose from a range of devices that they want to use to make payments, including cards, cell phones, and even watches, Foran-Owens says.