Interview: MasterCard leader says mobile payment faces obstacles in development

The development of mobile payment still faces obstacles while credit cards will be good for 10 or 15 years at the minimum, said MasterCard's senior vice president lately.

With the latest mobile payment technology, consumers can easily pay for their goods by just placing their smartphones close to terminals and putting their fingers on the phone's fingerprint sensors. No physical cards or password-typing are needed.

People can not only use mobile payment to buy things in stores, but make in-app purchases.

Companies like Apple, Samsung and Google have been racing to convince consumers that the future of payment is contactless and cardless.

Apple Pay has attracted 12 million users every month globally since its launch in October 2014, while Google's Android Pay has around 5 million people who use it monthly since becoming available in September 2015, according to mobile payment researcher Crone Consulting LLC.

But there are various obstacles that need to be overcome before the retail industry and consumers can enter a cardless era.

"We have a history, as a payment industry, of always wanting to figure out a way to support merchants and cardholders to do business together. There is a limiting factor. It's how quickly we can replace infrastructure," James Anderson, MasterCard's senior vice president for mobile and emerging payments, told Xinhua in a recent interview.

Many merchants, especially small ones, are reluctant to upgrade their terminals because of costs, and some consumers still have doubts about the security of mobile payment.

"Small merchants always take a bit longer... Obviously there's a need to get to the sort of a tipping point," said Anderson.

Markets like Australia, Canada and Britain have been doing contactless transactions for a few years, and "now obviously contactless transaction can migrate from the card to the phone very easily because it's the same behavior," said the vice president.

For the time being, in-app purchase is an area where mobile payment can be more easily promoted among smartphone users.

"Things like in-app is a good example of where a merchant can have an application and a consumer can shop in it. You hit pay, you go to your MasterPass wallet, you authenticate and then you are done. And obviously that's not constrained by a terminal, so I think that will accelerate as we see those use cases come along," said Anderson.

Aside from merchants, the latest NFC-based (Near Field Communication) mobile payment service can only be used on a limited number of smartphones.

In some major markets like China, the majority of consumers are more used to barcode-based mobile payments, as they can use apps like Alibaba's Alipay and Tencent's WeChat to complete the transactions on most of the smartphones, without having to buy a new one to use the NFC-based payment.

But Anderson believed that consumers in China will start seeing the merits of the NFC-based payment methods which are more secure and more convenient, although consumer habits are not so easily changed.

In markets like the United States, chip cards are perceived to be slower by consumers because they have to leave the cards in the slot, while contactless mobile payment can put some speed back into the transaction, Anderson pointed out.

"So we are really seeing in the United States at least that the consumer likes it, and merchants are beginning to understand. And I am sure that will happen in China as well," said Anderson. Endit