The joint trial, which began in mid-October, is taking place in the Netherlands. The program leverages the Secure Element in mobile phones to provide enhanced security for online transactions and is being taken to help MasterCard and ING better understand how consumers want to shop in the mobile era.

“The advantage of paying on the phone are that we can use the Secure Element on the mobile phone to achieve a level of security comparable to EMV cards, including authentication of the cardholder to the transaction using their card PIN, and we can deliver a consistent user experience across multiple transaction types  – contactless, phone, PC to phone,” said James Anderson, group head and senior vice president of mobile product development at MasterCard, Purchase, NY.

“One of the objectives of the trial is to learn how consumers respond to these experiences – is it better than current alternatives in their mind,” he said.

Mobile connections
In the system being trialed, online shoppers press a button on a merchant’s Web site, which invokes a Merchant Plug-In that generates a 2D bar code. 

Users scan the 2D bar code with their phone, which takes them to the basket they created online. From here they can pay by selecting their card, confirming shipping and billing addresses and authenticating using a PIN. 

“Other technical options for linking the two domains are possible in the future – we chose 2B barcodes because they are relatively simple to deploy,” Mr. Anderson said.

The trial extends the functionality of the Mobile MasterCard PayPass application, which can be used for contactless payments at point of sale, to provide a mobile payment experience for Internet merchants.

The solution being tested also supports users who want to shop and pay on a phone. In this scenario, consumers select merchandise they want to purchase, select their payment method, provide their shipping information and enter their PIN to authenticate the transaction.

An EMV-compliant cryptogram is supplied by the phone directly to the merchant’s payment gateway for processing.

Multiple payment use cases
In both scenarios, coupons and vouchers can be applied in real-time as the consumer shops. Additionally, retailers will be able to deliver e-receipts once a payment is successfully processed.

The trial comes at a time when online shopping is shifting from PCs to smartphones and tablets. As this shift takes place, consumers are likely to shop and pay in whatever way best fits their needs and lifestyle while retailers will be looking to provide the best customer experience regardless of where a consumer decides to engage with them.

The trial began in mid-October and will run through the first quarter of 2013.

“We see a future where the mobile phone will be used to facilitate multiple payment use cases – remote, contactless, PC to phone, in aisle etc.,” Mr. Anderson said. 

“The most popular will be those that meet the intersection of consumer and merchant needs, but we think that the approach we are trialing with ING will give us great learnings as to how to develop and deploy them – and their appeal to the most important stakeholder in the MasterCard payment ecosystem – the cardholder,” he said.

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York