For the First Time, MasterCard Opens up MDES to a Third Party With G&D Deal

Ever since MasterCard Inc. introduced its tokenization platform nearly 18 months ago, no third party has been allowed to offer the product, called the MasterCard Digital Enablement Service. That changed Tuesday with the company’s announcement that Giesecke & Devrient is connecting its Convego CloudPay platform to MDES and will be able to offer MDES tokenization to individual financial institutions looking to launch mobile wallets.

Launched a year ago, Convego CloudPay performs credential provisioning for mobile wallets and processes wallet transactions. MasterCard said as part of its announcement that the new link will be aimed specifically at banks introducing wallets that depend on host card emulation, a form of mobile payments that depends on near-field communication but retains account credentials in a cloud configuration rather than in the secure element or other phone-based chip. This ability to bypass the secure element—and avoid fees to access that chip—appeals to banks interested in launching their own, branded wallets.

The new arrangement with G&D, which historically has offered smart cards, bank notes, and cash-handling equipment for banks, allows MasterCard to extend the reach of MDES without the need to orchestrate connections to each individual bank issuer, an onerous technical chore.

“We wanted a one-to-many approach,” Sherri Haymond, senior vice president for digital payments and labs at MasterCard, tells Digital Transactions News. “It’s a lot of work for us to connect to each of these [issuer] partners, so you’re going to connect to G&D.”

With MDES piped through G&D, issuers can get tokenization service for their wallets from an entity already recognized as a trusted service manager for mobile payments, Haymond says. “That will help us scale and extend our reach,” she adds.

“This combined solution of MasterCard and G&D benefits all MasterCard issuing banks,” said Edgar Salib, group senior vice president in the financial institutions division at G&D, in a statement. “Our cooperation with MasterCard enables us to provide the safety and security of MasterCard digitized credentials while meeting the payment-credential provisioning and management needs of issuers.”

A global company, Munich-based G&D will be able to offer MDES to issuers in any area where the service is available. Right now, it’s live in the United States and the United Kingdom, “but we’re rolling it out to other countries,” Haymond says.

MasterCard announced the link with G&D at Mobile World Congress, which is taking place this week in Barcelona, Spain.