Battle commences for 'mobile money'

Feb 25, 2013 by Emmanuelle Trecolle
Financial groups are battling to control the lucrative future of 'mobile money', which lets people pay via a smartphone. MasterCard, Visa and online payments service PayPal are struggling for a slice of the industry as the world's biggest mobile fair, Mobile World Congress, opens in Barcelona, Spain.

Global financial groups battled Monday to control the lucrative future of "mobile money", which will enable people to use a smartphone to go shopping instead of cash and credit cards.

MasterCard, Visa and online PayPal struggled for a slice of the industry as the world's biggest mobile fair, Congress, opened in Barcelona, Spain.

It is a market with potentially rich rewards.

The industry is expected to grow from $13.8 billion (10.4 billion euros) in 2013 to $278.9 billion by 2018, according to a study released this month by group MarketsandMarkets, which estimates there will be about 5.3 billion mobile phones worldwide this year.

The banking and world had previously been nervous of the mobile money industry, said Magnus Rehle, senior partner at Greenwich Consulting.

"Now I would say that Visa and MasterCard are pushing payment via the mobile but they want to include their existing systems," he added.

"It is more like the credit card is moving into your phone." MasterCard announced Monday a new digital payment system that lets people use a wide variety of devices including smartphones.

A customer pays via a smartphone application in a Auchan supermarket near Lille, northern France. The mobile money industry is expected to grow from $13.8 billion (10.4 billion euros) in 2013 to $278.9 billion by 2018, according to a study released this month by global research group MarketsandMarkets, which estimates there will be about 5.3 billion mobile phones worldwide this year.

The system, known as MasterPass, stores customers' banking and personal information in a "secure cloud" online where it is available for the moment of payment whether in a store on when browsing the Internet, the group said.

Banks and stores will be able to issue their customers with MasterPass-connected "", which would accept credit and debit card information, including cards other than MasterCard's, the group said.

Shoppers would be able to use MasterPass on the web without having to key in their bank information and delivery address for each purchase.

But they also could make payments with the new system in other ways, including by waving a equipped with Near Field Communications, or NFC, technology near a special reader.

MasterPass will be launched in Australia and Canada by the end of March, in the United States in spring and Britain in the summer before expanding to other markets including Belgium, Brazil, China, France, Italy, Netherlands, Singapore, Spain and Sweden, MasterCard said.

MasterCard's archrival, Visa, was entering the fray with an announcement scheduled later in the day,

A sign promoting payment service PayPal at LeWeb Paris 2012 in Saint-Denis, near Paris. PayPal said it will be showcasing a new product that lets cash-based businesses accept PIN-number based "smart" debit and credit cards.

In a pre-emptive strike five days before the World Mobile Congress, PayPal invaded MasterCard and Visa's territory.

PayPal said it will be showcasing a new product that lets cash-based businesses accept PIN-number based "smart" debit and credit cards.

Merchants will be able to download a Paypal Here application for their Android or iPhone smartphone and then pair the handset with the new device, which they have to buy. The device can accept secure payments and issue receipts. For each transaction, whether by credit card, debit card or PayPal account, PayPal receives a "small fee".

"For mobile money often the most innovative markets have been emerging markets rather than developed markets," said Ian Fogg, senior mobile analyst at research house IHS.

"What is interesting is the shift where you see people like Visa and MasterCard getting interested and involved," he said.

"They have a role that is cross country, cross bank and one of the challenges of the mobile service is getting that economy of scale, getting all the different parts of the ecosystem together and those guys are able to look across the ecosystem in a way that I think an individual bank finds it harder to do."

Explore further: Cheaper wireless plans cut into AT&T 2Q profit

add to favorites email to friend print save as pdf

Related Stories

MasterCard launches new digital payment system

Feb 25, 2013

Credit card giant MasterCard announced Monday the launch of a new digital payment system that lets people use a wide variety of devices including smartphones to spend their money.

Mobile industry champions paying with phones

Mar 04, 2012

Paying with a mobile phone is gradually become a reality for consumers, with banks, telecommunications operators and Internet players all jumping in to offer payment options.

Discover finds partners in evolving mobile payments

Sep 22, 2012

In a memorable episode of "Seinfeld," George suffers from back problems because of a ridiculously overstuffed wallet. His wallet later explodes. The episode mocked one of the inconveniences of the modern world, the explosion ...

Digital 'wallets' proliferate at cellphone show

May 10, 2012

Cash, coins and credit cards are so Twentieth Century. At least, that's the opinion of the electronics manufacturers, phone companies, banks and credit card issuers that expect cellphones to be the main way consumers pay ...

Recommended for you

Cheaper wireless plans cut into AT&T 2Q profit

1 hour ago

(AP)—AT&T posted lower net income for the latest quarter due to cheaper cellphone plans it introduced as a response to aggressive pricing from smaller competitor T-Mobile US.

Android grabs more tablet market share

3 hours ago

Global sales of tablet computers edged higher in the second quarter, in the slowest growth since 2009, research firm Strategy Analytics said Wednesday.

Microsoft CEO sees 'bold' plan as 4Q tops Street

15 hours ago

(AP)—Microsoft Corp. CEO Satya Nadella painted an upbeat vision of the future Tuesday, saying that the next version of Windows will be unified across screens of all sizes and that two money-losing units—Nokia ...

Apple's fiscal 3Q earnings top analyst forecasts

Jul 22, 2014

Apple's growth prospects are looking brighter as anticipation builds for the upcoming release of the next iPhone, a model that is expected to cater to consumers yearning for a bigger screen.

User comments : 0