IMGCAP(1)]
MasterCard Worldwide today announced the launch of an over-the-air provisioning service, which the card company says will make it easier for issuers and consumers to set up MasterCard's PayPass contactless-payment application on mobile phones. Although most observers agree rollouts of mobile payment using Near Field Communication technology likely will not happen until 2010, MasterCard is promoting the new service as a way for issuers "to move more aggressively into the mobile-payments space." The service would enable issuers to put the PayPass application onto NFC phones in a "reduced timeframe." Consumers could then tap their phones on the same terminals that accept PayPass contactless cards. MasterCard intends to charge banks a fee to use the service. It would allow banks to avoid dealing directly with companies called "trusted service managers," or TSMs, that will do the actual downloads and personalization of the payment application. "The way it works, a bank would connect into us for these provisioning transactions," James Anderson, vice president for product development at MasterCard's mobile center of excellence, tells CardLine sister publication Cards&Payments. "We'll do a certain amount of work, and we're going to route it to individual TSMs. From the bank's perspective, we're aggregating all these TSMs, so the banks don't have to worry about which specific TSM is going to deliver a customer's credential to their phones." MasterCard hopes the service will give it an edge over rival Visa Inc. But key to the service working is for MasterCard to have relationships with all trusted service managers that will set up shop in a given market to handle NFC payment. To date, MasterCard, like rival Visa Inc., has participated only in NFC trials. Provisioning the phones with payment applications in past NFC trials did not always go smoothly. "It has been a challenge," says Edward Kountz, senior analyst at U.S.-based JupiterResearch, now part of Forrester Research. "If, for example, a provisioning does not work as planned, sometimes banks have not been able to deal with reversing that." Though NFC phones are not expected to become available in volume until 2010, MasterCard felt it was "better to be a little earlier to the game than a little late," he said. Kountz, however, does not believe the MasterCard announcement is designed to take back the initiative on mobile payments from Visa, which late last month made three deal announcements that could put its payment services on a new NFC phone from handset maker Nokia and on phones that run Google Inc.'s new Android operating system, along with trials for P2P payments in the United States.
