Apple Pay scooped up one million payment cards in its first 72 hours, 60% of which were Visa cards, but MasterCard's chief executive still expressed optimism for the payment network's chances in the rapidly shifting mobile landscape.
Whatever Apple Pay's effect, it is not a competitor, MasterCard President and CEO Ajay Banga said during the Purchase, N.Y., company's Oct. 30 earnings call. Though some payment companies are casting Apple as a rival, MasterCard is actively promoting the new mobile wallet through efforts such as offering its MasterCard Nearby app as an unofficial Apple Pay merchant locator.
Banga also used the call as an opportunity to describe the card network's plans for its own MasterPass wallet, which is now in 11 countries with the recent addition of Taiwan. The card network plans to add in-store checkout and private-label services to MasterPass, is currently supported by about 40,000 merchants globally.
"Digital is a wide space that has many aspects to it," Banga said. "There's a lot going on in the Apple Pay space. I don't [think] that [Apple Pay] conflicts with stuff that we're doing in mobile."
The overall migration away from cash payments is the main opportunity created by Apple Pay and other digital payment initiatives, he said.
Not everyone sees Apple Pay so favorably. EBay's PayPal was quick to declare Apple Pay a rival, though in eBay's earnings this month CEO John Donahoe suggested the companies could someday reconcile. And the Merchant Customer Exchange, a mobile wallet initiative backed by retail giants including Walmart and Target, came under fire this week after some members started blocking Apple Pay.
Like most payment executives, Banga predicts that Apple Pay will boost usage of mobile payments. That will increase the need for need standardized protocols such as the card networks' new alternatives to traditional account numbers, Banga said.
Visa and MasterCard want to replace account numbers with a digital payment "token" for online and mobile payments. The card networks are also proposing the use of data fields to provide richer information about transactions to inform fraud detection.
"Tokenization can be used to make digital transactions work across any device. It's like EMV, it's an open industry standard," Banga said.
The networks have separate token technologies, Visa Token Service and MasterCard Digital Enablement Service, which are used by vendors such as Fiserv and is required for Apple Pay.
MasterCard reported third-quarter net income of $1 billion, up 15% from $879 million the prior year. The quarter's highlights included opening a technology hub in New York, the launch of Apple Pay and a contactless payments project with London's transit system, Banga said.