As the first project coming out of MasterCard’s newly introduced “Labs” initiative, the company has opened its payment technology to third-party developers in hopes of fostering innovation for Online and mobile payments.
MasterCard had already experimented with its own app offerings, but if outside developers wanted to use its payment technology, they were forced to get a merchant agreement, set up the payment system and make the consumer enter data each time, which greatly limited the potential.
With its new open platform, developers can do things like embed a payment feature in virtual games or in e-commerce apps on Twitter or Facebook, for example, or build an app that sends a text message to the card’s owner before a purchase is made.
“A big part of the strategy is to be able to harness the innovation of others in the developer community to really push our business forward,” said Josh Peirez, MasterCard’s chief innovation officer.
E-commerce and mobile payments are changing the way we use money, Mr. Peirez said. Though MasterCard, Visa and other payment companies have experimented with building their own apps for things like mobile money transfers, MasterCard wants to see what other people can come up with for paying online and in the real world.
“You’re seeing quite different ways people are paying for digital goods, but you haven’t really seen that translate into physical goods,” he said. “It’s still really hard to buy a physical item from your phone.”
So far, MasterCard has identified about 20 of its services that developers will be able to use in their applications. They include payment technology, bill payment systems and data streams like consumer spending patterns, which could be used to send coupons. With a company like MasterCard behind the initiative, big things are likely on the horizon- stay tuned.
