MasterCard Leads Nation's First Market Trial of Mobile Phones Enabled for Payment

MasterCard Worldwide today announced that it has brought the promise of mass market availability of “Tap & Go”™ payments via mobile phones one giant step closer to reality. In partnership with Nokia and 7-Eleven, Inc., MasterCard is now conducting a consumer trial in Dallas, Texas, of Near Field Communications (NFC)-enabled mobile phones with MasterCard PayPass capability.

Up to 500 participants from the 7-Eleven Speak Out™ wireless program are getting NFC-enabled Nokia 3220 mobile phones and instructions on how to wirelessly enhance them with MasterCard PayPass payment functionality, via Giesecke & Devrient (G&D)’s new secure chip management solution. Once these simple steps have been taken, participants will then be able to use the phones to make purchases at any of the 32,000 merchant locations worldwide that accept MasterCard PayPass. The trial will run for approximately six months

“Mobile commerce has traditionally been held back by both business and technology considerations, making it more of an inconvenience to use a mobile phone for a purchase than to simply pay using cash,” said Dan Schatt, senior analyst, Celent Communications. “MasterCard’s latest initiative involving over-the-air personalization is game-changing because little if anything must be done by the consumer to use their mobile phone as their wallet. We’ve already seen the tremendous value other countries are deriving from contactless mobile commerce, and we expect this initiative to have a significant impact on the way U.S. goods and services are paid for at the point of sale in the future.”

PayPass offers consumers a convenient alternative to cash that allows for small-ticket purchases to be completed quickly, securely and easily. Consumers no longer need to fumble for cash and coins, swipe a card, or sign a receipt for any PayPass purchase under $25. Users simply tap their PayPass-enabled phone, card, or device on the PayPass reader at participating merchants and they are on their way.

“Dallas is the testing ground for a technology that has the potential to transform the way consumers pay for everyday items,” said Richard Fletcher, group head, Mobile/Wireless, MasterCard Worldwide. “As far back as the late ’90s, MasterCard recognized the global opportunity presented by mobile commerce. Until now, though, mobile payment trials were limited by their lack of scalability. Now, with a few simple steps, consumers can turn a cell phone into a PayPass payment device.”

Consumers who join the trial will be furnished with an eFinity prepaid account that can be accessed either by a PayPass card, or the PayPass phone. Wireless service and network access will be provided by 7-Eleven, through its prepaid Speak Out wireless program.

How Secure Chip Management Works

To enhance an NFC-capable phone with MasterCard PayPass, consumers make a one-time request to their bank to register for the service. Data is sent by G&D’s secure chip management platform over the carrier network. It automatically loads, activates and personalizes the PayPass payment application inside the mobile phone’s built-in “secure area.” Secure chip management allows flexible and individual control of the payment application in the phone’s secure area. The wallet application on these phones can also be password protected so that a lost or stolen handset cannot be used to make payments.

Once the phone becomes PayPass—enabled, it can be used to make purchases at any of the approximately 32,000 merchant locations around the world that accept PayPass, including 7-Eleven stores, McDonald’s, CVS, Duane Reade, Sheetz, and Regal Entertainment Group. PayPass is now accepted in many Major League Baseball and National Football League stadiums.

This is all made possible via NFC technology, a feature built into next-generation mobile phones such as the NFC-enabled Nokia 3220. NFC is a very short-range proximity technology that uses RF to enable secure, contactless communication between two devices. Contactless payment is only one of the many data-transfer applications that NFC enables, which makes it an attractive technology for carriers looking to increase handset utility for consumers.

There are a number of PayPass-related programs currently under way in thirteen countries around the world. PayPass rollouts and trials have been announced in the United States, Canada, United Kingdom, Japan, Korea, China, Thailand, Turkey, Lebanon, Malaysia, Australia, Taiwan and the Philippines, with more programs and rollouts anticipated this year.