MasterCard brings digital wallet to Canada

Organizations hoping to simplify online shopping for customers have a new option from one of the world’s biggest credit card companies.

MasterCard has launched its MasterPass digital wallet in Canada, a cloud-based authentication platform that can store up to 25 credit cards of any type, pre-paid credit cards, and debit cards branded by Visa or MasterCard. However, it can’t be used with Interac debit cards.

It hopes MasterPass will eventually be used for both in-store purchases and online purchases alike. At the end of an online purchase process, buyers click on a button that says “Buy With MasterPass” and log in.
Four merchants will start offering the wallet today: Porter Airlines, which flies to Toronto, Ottawa, New York and 16 other nearby cities; WagJag, an online discount goods site;, a travel site; and Grocery Gateway, a Toronto-area online grocery delivery service.

MasterCard estimates about 800 vendors around the world will support the payments platform by the end of this year, and that 2,800 vendors will be using it by the end of next year.

Canada is one the second country to get the platform, after Australia. It will be offered in the U.S. and the U.K. in the next few months and in Belgium, China, France, Italy, the Netherlands, Singapore, Spain and Sweden.

MasterPass was prompted by MasterCard’s own market research showing that 50 per cent of in-store spending is being influenced by digital and mobile channels, according to David Orzel, the company’s senior vice-president of market development. The bet is that many of those consumers will complete the transaction on those channels, given an easy enough way to do so.

“You’ve got your smartphone, you’ve got your tablet, there’s probably a laptop running somewhere and of course you have your TV screen,” he said in an interview. “Our vision is there’s a point of convergence.”

MasterPass is the credit card firm’s digital payments answer to services like PayPal. Merchants can plug in to the payment authentication system to accept credit card payments without requiring buyers to register on their own sites, and other financial institutions can white label MasterPass to offer their own digital wallets.

Bank of Montreal will be offering a MasterPass-enabled BMO Wallet in the coming weeks, the first of this kind of partnership.

MasterPass provides an application programming interface (API) to allow third-parties to connect to its platform. Merchants can use this to integrate the payments solution into their own site, as deals site WagJag has done.

WagJag doesn’t accept PayPal payments because that service is a payments processor, says Jonathan Naymark, a product specialist at TorStar Digital (the parent company of WagJag). “With MasterPass, we simply accept the payment, get the authentication passed back to us, and then send it to our existing payments processor,” he says.

MasterCard’s aim is to simplify the online checkout process and help merchants convert more customers as a result, instead of seeing them abandon shopping carts because of the hassle of typing in credit card information or registering for an account.

MasterPass will eventually be used for in-store purchases too. A merchant could display a QR-code that contains the shopping cart information, and a customer could use their smartphone to snap a picture of it, then complete the digital transaction via MasterPass. The platform also supports NFC transactions, allowing consumers to tap smartphones to wireless terminals to pay.

“On this platform we can do e-commerce transactions and NFC transactions,” says Will Giles, emerging payments lead for MasterCard. “We have the architecture designed to do this.”

The security approach to the platform is to raise the bar on registration and lower it on transactions, Davies says. Consumers can also activate a second layer of security that will have MasterPass send them a four-digit code via text message that they will then have to type in to complete a transaction within a set amount of time.

MasterPass will also soon support loyalty program identification, so consumers will automatically receive points when completing transactions at the stores they have loyalty memberships for, and have registered that program with MasterPass.

Earlier this week, Japan-based announced it will be using MasterPass on its e-commerce site. The firm is also the owner of Toronto-based e-books firm Kobo.


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Brian Jackson
Brian Jackson
Former editorial director of IT World Canada. Current research director at Info-Tech

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