MasterCard Exec Says Google Wallet Boosts Choice
The Google Wallet service announced on Thursday by Google, MasterCard, Citi and numerous U.S. retailers represents a bold move by Google to enter the world of brick-and-mortar commerce.
Thu, May 26, 2011
IDG News Service — The Google (GOOG) Wallet service announced on Thursday by Google, MasterCard (MA), Citi (C) and numerous U.S. retailers represents a bold move by Google to enter the world of brick-and-mortar commerce.
But it also marks a big step forward for mobile payments technology that could change consumers' experiences with shopping with their phones. Mung Ki Woo, a group executive for emerging payments in MasterCard's mobile division, met with the IDG News Service on Thursday to talk about the future of this technology.
IDGNS: Why did MasterCard sign on to this project with Google?
Woo: We recognize that mobile is arriving and that people are prepared to use their mobile phones to buy and to make payment transactions, and we want to be at the forefront of this movement. We are prepared to work with all the companies that share the same vision. Google is a company that is very deeply committed. They are very ambitious in this space, so we are extremely happy that we are working with them.
IDGNS: What are the main barriers that have kept mobile payments from taking off?
Woo: There are two geographies. In the very developed economies, we have payment services that work very well. In particular, the card works extremely well. So utilization of existing mobile technology such as voice, SMS or Internet browsing over the phone to conduct payment transactions has been trialed in a number of places, but it hasn't taken off, simply because the experience is inferior to the experience of the plastic card. If using your phone is more complex, takes more time, than handing over a piece of plastic, then it was doomed from the very start. The change today is that with PayPass inside the phone, we will have a better consumer experience. [PayPass is a technology that's used today in special chip-equipped payment cards from MasterCard.]
In the rest of the world, mobile phones are used as a way of providing basic financial services. And because, in the rest of the world, cards are less developed and the normal banking infrastructure is less developed, and phone penetration is so much higher than we've seen over the past few years, mobile payment developed there, but in a different way.
IDGNS: Have the security issues with mobile payments been solved?
Woo: It's the same PayPass technology that you have today on cards -- plastic cards -- that is going to be there on phones. It's the same level of technical security, and in addition, when you have a phone, you have a number of additional safety features. The first one is purely related to the consumer experience. A consumer will detect the fact that he's lost his phone much quicker than if he's lost his plastic card. The second thing is that if you have indeed lost your phone, we will be able to deactivate the payment function inside your phone, because the phone is a connected device. Whereas with a card, it's impossible.
