Article

MasterCard to drive payments for the Internet of Things

At Money 20/20, the card network announced a new program that will enable companies to add card credentials to devices such as automobile key fobs, smart rings and even clothing.

October 26, 2015 by Will Hernandez — Editor, NetWorld Media Group

As the market for the Internet of Things and wearables continues to take shape worldwide, MasterCard wants to be at this shift's forefront — and is giving companies the ability to add payment credentials to devices such as automobile key fobs, smart rings and even clothing through a program that is an extension of its digital enablement service. 

MasterCard Monday announced at the Money20/20 conference in Las Vegas that its initial partners in this endeavor include fashion designer Adam Selman, automotive giant General Motors, wearable technology company Nymi, smart jewelry company Ringly and Bluetooth locator TrackR. 

"What we're trying to do with this announcement and creating this program is to show that there are many possibilities [with the Internet of Things, wearables and payments]," Sherri Haymond, senior vice president and group head for digital channel engagement at MasterCard, told Mobile Payments Today in an interview ahead of the announcement. 

"What we're doing is trying to marry [payments] with some of the creative energy that comes with companies like Ringly, and Adam Selman," she said. "We also envision yet-to-be-imagined devices that will also contain a payments functionality."

MasterCard is working with chip manufacturers NXP and Qualcomm to help companies implement contactless payments capabilities into their devices. 

Capital One is the first prominent issuer to announce its support for MasterCard's program.  

Nymi is one of the first companies to bring its concept for wearable payments into the public, albeit in a limited pilot. The Toronto-based company over the summer announced what it called the world's first biometrically authenticated, wearable credit card payment using one's heartbeat. 

Nymi is working with TD Bank and MasterCard on the project. More than 100 TD users in Toronto, Ottawa and Regina during the summer tested the Nymi Band's contactless payment functionality. Other participating Canadian banks are scheduled to launch similar pilots this quarter, and Nymi expects several thousand payments to be made using the Nymi Band during this time.

"MasterCard's initiative is a natural fit with Nymi's vision of seamless and secure user experiences," Karl Martin, founder and CTO of Nymi, said in a statement. "The next generation of integrated experiences is about ease and delight, where security can simply be assumed."

General Motors' contactless key fob is another example of what we can expect not only for proximity "mobile" payments, but also what Haymond called a more "integrated commerce experience" that involves a consumer’s automobile. 

Not only will consumers use the key fob to pay for a latte at Starbucks once the coffee chain installs contactless point-of-sale terminals in its stores, but the device also can interact with an automobile's console when inserted into the ignition to allow for those integrated commerce experiences Haymond mentioned.

If you need to order a pizza on the go from the car, and pick it up on the way home for dinner, GM will have you covered. 

"Vehicles are becoming more connected, and this will enable our customers to maximize their connections to all aspects of their lives, including new and easier ways to pay for goods and services," Tom Grekowicz, senior manager for GM Rewards Card, said in a statement. "This partnership with MasterCard will help us learn more about our customers' preferences and how we can best serve them."

MasterCard emphasized the security of these transactions in this announcement and will use what it calls "domain restrictions" on the tokenized data in each device. 

"If someone tries to use a payment credential that was provisioned for a Ringly ring for an e-commerce transaction, MasterCard's system will know that the transaction is fraud and will decline it," Haymond said.

About Will Hernandez

---

Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.

Connect with Will: