For mobile payments to move into the massive adoption phase, some version of loyalty/couponing will be essential. Otherwise, once the novelty wears off, there are simply no sustainable reasons for shoppers to stick with mobile. But with every mobile player preparing to somehow push loyalty, the chance of having conflicting incompatible technology is all-but-certain. Can MasterCard change that?
On Tuesday (Nov. 17), the number two card brand introduced a loyalty middleware specification that it hopes will be adopted widely enough to give mobile loyalty a chance to grow seamlessly. Given that few if any mobile payment schemes will be offered without support for at least one issuer’s MasterCard, the card brand seems a sufficiently politically neutral player to sidestep the usual vendor resistance.
In MasterCard’s statement, the brand said it’s proposed specification “enables mobile applications to offer a seamless connection between payment, promotions and loyalty redemption. It enables consumers to select their loyalty card, the coupons/promotions they want to redeem, and make a payment in a single or double tap at a contactless terminal.”
Although it may indeed “enable consumers to select their loyalty card,” that’s not likely something that most shoppers will have to deal with. Officials with both Apple Pay and
MCX’s CurrentC have painted scenarios where shoppers will walk into a store and the system—possibly by detecting a Wi-Fi signal or a beacon—will automatically launch offers associated with that retailer’s loyalty app.
But by specifying a mechanism where the shopper does have to launch the loyalty app/card, it not only brings in far more mobile wallets, the specification is there to help when MCX and Apple encounter technology that refuses to cooperate.
MasterCard said that it “has been working with a number of industry partners to develop and validate this standard, which is designed to work with different loyalty schemes, different point of sale terminals and systems, and different payment methods.” (We take judicial note of the fact that “a number of” means nothing, given that zero is a number.)
The card brand did list a handful of partners, including Ingenico, Spire Payments, PAX, eThor, Newland and Panasonic.
James Anderson, executive vice president, Digital Payments, MasterCard, issued a statement that his team’s goal is to “implement one standard approach to enable a seamless experience in redeeming loyalty points or promotions when making mobile payments at the point of sale” and that “having one standard will make it easier and less costly for merchants, wallet issuers, terminal providers and others in the industry to implement these programs and focus on other elements of the customer experience.”
Anderson’s comment that having a single standard will make things easier is certainly true, but it sidesteps the question of which company’s standard should be used. Unlike other aspects of payments, there is not if any incentive for MasterCard to skew a loyalty standard to help any consumer goods company, retailer, issuer or anyone else. Other than frowning at direct loyalty offers from Visa or Amex, there is little reason to be overly suspicious of MasterCard here.
The issue, therefore, is less of which standard to use, but who will most aggressively and rapidly push a standard. Thus far, MasterCard has taken the lead.