NEW YORK--It's been a long time coming, but the mobile-payment revolution may finally be here.
MasterCard, one of the major credit card issuers eyeing the market for years, is set to launch its service in the U.S. with partner Google. The company is the exclusive credit card issuer for the launch of Google Wallet, a digital-wallet application for Google Android phones.
Google Wallet lets people store credit card information, gift cards, and loyalty cards in a digital format on their phones. And using short range wireless technology known as near field communications, or NFC, it allows people to pay for things with their phones. The Samsung Nexus S on Sprint Nextel will be the first phone to get the Google Wallet application.
MasterCard has worked with other partners outside the U.S. and is already offering mobile payments via cell phones in other parts of the world, including the U.K. and Turkey.
Using its PayPass tap-to-pay system consumers can simply swipe or tap their phones to pay for everything from a Coke in a vending machine to a ride in a New York City taxi to lunch at McDonald's.
At an event in New York City this week, the company showed off some of the capabilities of the Google Wallet, which was announced in May and is expected to launch this fall. And it also showed off some new applications for mobile payments that it hasn't commercialized yet.
With the Google Wallet, MasterCard showed how users could easily open the wallet with a four-digit password, choose which credit card to use, and then tap a vending machine to purchase a Coke. Unfortunately for the demonstrators, the cellular phone network used by the vending machine to authenticate the payment had a weak signal. So the purchase didn't actually go through.
Another demonstration showed how Google Wallet can keep track of spending for consumers. And if a certain predefined limit is hit, it lets the user know.
In addition to the Google Wallet integration, MasterCard showed off how it plans to use QR codes to let people buy things more easily. In one demonstration it showed how a QR code could be shown as part of a home shopping channel to allow people to buy items they see on TV directly from their phones. In another demonstration, a TV commercial broadcast a high-frequency audio code that could be identified by the phone. In each instance, the featured item on the TV appeared on the phone's screen. The shopper was then given the opportunity to pay for the item or save it in a shopping cart.
MasterCard also showed how QR codes could be used on posters in retail locations or in other public places to let consumers buy goods on the spot. The company used a poster advertising a concert to demonstrate. A user could scan the QR or tap the phone to an NFC receiver to get access to a page where tickets to the concert could be bought. Consumers also had the choice of unlocking a video of the band.
And finally, MasterCard showed how a customer using a QR code reader or the NFC capability on a smartphone at a fast-food restaurant could order directly from the phone without standing in line. The code and the NFC receiver were embedded in the table, and the idea was that once patrons ordered and paid for their food, the server could just bring the food directly to the table.
Some of these new applications and features are being tested now in commercial markets, but MasterCard wouldn't say when these new services would be generally available. The hope is that as more smartphones come on the market with NFC embedded and with the ability to read QR codes, mobile payments will become the new way of paying.