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MasterCard exec: Mobile payments adoption tied to security technology

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April 30, 2015

MasterCard tokenization.

MasterCard doubles down on tokenization.

NEW YORK – A MasterCard executive at the Mcommerce Summit: State of Mobile Commerce 2015 said leveraging smart technology to establish the secure use of services is the key to building trust that will accelerate broad adoption of mobile payments.

A takeaway from the session, “MasterCard: Insights into the Changing Face of Retail Transactions,” was that the core of establishing consumer adoption of technology is trust. The view comes as research shows a slow, yet steady, improvement in how consumers perceive mobile-payment security.

“One of the reasons we work with financial institutions is they have trust with consumers today,” said Matt Barr, United States emerging payments lead for MasterCard, Purchase, NY.

“When we think about introducing new technology we build it in such a way that we know it’s going to have high integrity, high security, and therefore the risks of being compromised are completely minimized.

“And therefore, you establish trust through credibility over time,” he said.

The Mcommerce Summit: State of Mobile Commerce 2015 was organized by Mobile Commerce Daily and Mobile Marketer.

Ensuring integrity
The session looked at how increased connectivity has created more efficient, easier ways to receive, hold, access and activate money and how it raises the need for enhanced security to ensure the integrity of every transaction.

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Matt Barr at the Mcommerce Summit.

Data shows consumers are talking more positively about mobile payments, a turnaround from the recent past when sentiment on mobile payments had been weak.

Ninety-four percent of global conversations are positive regarding mobile payments, Mr. Barr said. Meanwhile, 58 percent of US adults perceive mobile payments as less secure than using a credit or debit card. Sixty-eight percent of US smartphone users are concerned about having their activity tracked.

Eighteen percent of online adults have had personal information stolen as of January 2014.

MasterCard and other card companies have an edge over other verticals seeking broader mobile payment adoption by having ties to banks which are seen as the most trustworthy providers of a mobile wallet solution.

Seventy-one percent of mobile bankers have downloaded their financial institution’s app.

The statistics Mr. Barr cited fit with a survey of consumer mobile payment trends conducted in March by 451 Research’s ChangeWave service that found that one in four respondents believed mobile payments were more secure than traditional credit cards, while 27 percent thought they were less secure.

The data represented a net 3-point improvement compared with December and a major 26-point improvement since a year ago.

Earlier this year, MasterCard, along with card rival Visa, began doubling down on technologies such as tokenization and biometrics to safeguard customer data on smartphones.

MasterCard announced a pilot program with First Tech Federal Credit Union to use biometrics such as facial and voice recognition as well as fingerprint matching to authenticate transactions.

Visa began to expand a program that replaced 16-digit account numbers with a unique series of numbers called a token in online and mobile payments.

Biometrics have been getting a lot of attention lately following the introduction of Touch ID by Apple last year. The finger recognition technology enables users of newer iPhone models to unlock their device and complete purchases using Apple Pay, with the fingerprint information store locally.

MasterCard’s introduction of EMV or chip technology is based on tokenization or a chip that sits on in a mobile telephone. The chip generates a unique code for each purchase. That unique code all but eliminates counterfeit fraud.

Spurring adoption
Although trust, the core of establishing consumer adoption of technology, takes time to build, it can be done.

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Looking at the state of mobile commerce.

“What we’re seeing in markets where MasterCard has not introduced new technology, consumers will start they’re nervous,” Mr. Barr said. “You see it in the feedback we see today around people’s concerns around mobile payments.

“Once they’ve tried it three times and they didn’t have a duplicate payment come through on a bill, the information hasn’t been compromised or used somewhere else to make a payment, then they get comfortable with it and adopt.”

Final Take

Michael Barris is staff reporter on Mobile Commerce Daily, New York

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