When Internet banking first dawned in 1997, the dream was that consumers would eventually have a digital wallet that they could use to purchase goods and services. A consumer would whip out this digital wallet and scan it over a reader to pay for a can of soda, or groceries, or a new shirt. For the next ten years, this vision remained mostly a dream. In the last year, fueled by the sales of smartphones, the vision is becoming reality.
Last May, Google announced its Google Wallet, software that allows consumers to store and use payment information to easily purchase goods and services from a phone. Today, Mastercard and mFoundry announced that they are teaming up to provide another solution in the mobile payments space. mFoundry currently provides mobile banking services to over 500 banks and credit unions. mFoundry will provide the banking appliation on the phone, and Mastercard will provide the terminal (called PayPass) which consumers can use to swipe their phones using a technology called Near Field Communication (NFC).
"This collaboration is going to allow more banks, credit unions and mobile phone operators around the world to offer their customers the convenience and security of Mobile PayPass.” said Ed McLaughlin, chief emerging payments officer, MasterCard. “By using the power of a smartphone, consumers can simply tap and pay for goods and services."
"By working with MasterCard, mFoundry will be able to evolve and expand its financial services platforms to reach more consumers through new and existing clients,”said Drew Sievers, CEO and Co-Founder of mFoundry. “MasterCard shares our philosophy on how to enable its clients with mobile payments and we are thrilled to be working hand-in-hand with them to bring their PayPass solution to our clients."
It will be interesting to see which companies emerge as winners from the mobile payments space. mFoundry is betting that its close relationship with banks will make it the winner while Google is planning to use its direct relationship with millions of customers to spread its technology. Look for other big technology and banking companies to also get in the game. No matter who wins, the vision of paying for a can of Coke at a vending machine by holding up your phone to a reader is close to becoming a reality.