When it comes to mobile payments, it's really just a matter of "when." It's obvious that it's happening, and it's catching on (albeit slowly) around the globe. The specifics have to be worked out, and there's still a lot of work to be done in terms of partnerships, but we're slowly but surely moving towards a society that pays for everyday goods with their phone. MasterCard and ING, two huge names in the financial industry, have today announced a joint trial underway in the Netherlands that is demonstrating a new way to pay online using mobile phones. The trial extends the functionality of the Mobile MasterCard PayPass application, already used to support contactless payments at point of sale, to deliver a highly secure and easy to use payment experience at internet merchants.
The solution being tested in the trial supports two scenarios: first, shopping and paying on a phone where the consumer is able to 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. In the second scenario, the consumer is able to start their shopping on a PC or tablet, and then complete the payment step on their phone using a secure QR code that connects the Mobile PayPass application in the user's phone securely to the merchant's online shopping cart.
In both cases, coupons and vouchers can be applied in real-time as the consumer shops, and e-receipts presented upon successful payment. The trial promises to deliver a similar user experience in both the physical and digital world and a comparable level of security to a regular EMV transaction. The trial, which began in mid-October, will run through the first quarter of 2013, but there's no word on international expansion just yet.