AMSTERDAM | MasterCard Netherlands aims to get its Digital Wallet Service MasterPass live before summer 2014. Together with Payment Service Provider Buckaroo, merchant acquirer PaySquare and online merchant Create2fit, MasterCard strives to process the first Dutch MasterPass transactions in June.
MasterCard revealed that later this year at least one major Dutch bank will allow their customers to use the wallet for purchases using their Maestro debit card. MasterCard announced the news preceding the 'What's going on in Retailing' event in Amsterdam held yesterday.
MasterPass in the Netherlands
MasterPass, already launched and accepted by thousands of online merchants in the US, Canada, Australia, UK and Italy, will soon get its introduction in the Dutch ecommerce market. Both issuing banks (to serve the MasterPass wallet to consumers), Merchant Acquirers and Payment Service Providers (both routing and processing transactions on behalf of merchants) are updating their systems to support MasterPass transactions. According to MasterCard Netherlands, around 100 Dutch online retailers have already committed to accept MasterPass checkout later this year. Amongst the first Dutch retailers to accept MasterPass are PayLogic, BCC, Front Runner, Plasmadiscounter.nl and jeansandfashion.com.
ICS the first MasterPass issuer in the Netherlands
International Card Services (ICS), the largest credit card issuer in the Netherlands, will be the first mover on the issuing side. It is expected that within 1 to 2 months the first ICS MasterPass wallet will be available. Later this year two other major banks will follow. These 3 banks service around 4.6 million Dutch credit cardholders. All banks adopting MasterPass have the possibility to 'brand' the wallet and use their own name, look and feel. In addition, all banks are able to determine their set of security rules to prevent fraudulent use (e.g. by enforcing username and/or password login to the wallet, use device fingerprinting, PINcodes etc.). How the banks will enrol MasterPass (opt-in vs opt-out) and with what speed is yet unknown.
MasterPass empowering eMaestro
Important to recognise is the fact that at least one of the major Dutch banks will allow their customers to use their Maestro card through the MasterPass wallet. Maestro is by far the dominant card payment method used for purchases in Dutch stores. Almost every Dutch consumer above 12 years has one or more Maestro cards. However, till date, no Dutch issued Maestro card can be used to make online purchases (domestic or cross-border). The MasterPass wallet might change all that. It could entail that iDeal, the preferred online (debit) payment method in the Netherlands, will get some competition on the debit side.
MasterPass Supporting Payment Service Providers and Acquirers
Following the Payment Service Providers (PSPs) and Payment Gateways committed to support MasterPass in UK, Italy and Sweden, MasterCard Netherlands revealed that Ogone, Adyen, Buckaroo and Docdata Payments, all with offices in the Netherlands, will offer MasterPass checkout to their merchants in the upcoming months. Merchant Acquirers active in the Netherlands like Worldline, PaySquare, and EMS and connected to the aforementioned PSPs are the ones committed to process and settle MasterPass transactions. Merchants willing to accept MasterPass transactions need to contact their PSP and acquirer for more information.
MasterPass Integration and Merchant Website
As the 'Buy with MasterPass' button should ideally appear early in the checkout process (so-called 'express checkout'), it will impact the technical environment (shopping cart) of the merchant as well. So, not only the PSP or merchant acquirer should enhance their systems, also the merchant needs to take action. Another option would be to add MasterPass as one of the payment options on the merchant's (hosted) payment page (next to iDeal, MasterCard, Visa, Bank Transfer etc). That way implementing and accepting MasterPass might be quicker, however, it would take away the added value of MasterPass: improved checkout speed and convenience. MasterCard and Payment Service Providers do recognise the challenges merchants might face and are talking to the major shopping cart providers like Magento to offer standardised MasterPass integration. More on this subject in later stage.
MasterPass: benefiting Consumer and Merchant
MasterPass aims to serve both consumer and merchants' needs. On the one hand MasterPass simplifies the payment checkout for consumers when shopping online and on the other hand it increases conversion rates for merchants. How? By simply allowing the consumer to skip time-consuming and burdening steps in the check-out process. When buying with MasterPass, there is no need for consumers to enter their credit or debit card details, expiry dates or CVC code (3-digit security code) nor is there the need to enter their shipping address information. Both card and shipping information is securely stored in the MasterPass wallet. Merchants know that these 2 steps (providing address information and entering card details) could cause shoppers to abandon their shopping cart and not complete the purchase. Take into consideration the rise of mobile shopping, imagine consumers having to enter all information on smaller devices and keyboards, it makes sense for merchants to offer their customers a simple checkout using a digital wallet like MasterPass.
The MasterPass Wallet
Probably many people using Apple's i-Tunes or Google's Play Store are already familiar with a digital wallet similar to MasterPass wallet (usage is then however limited to Apple or Google's app shopping domain). MasterPass, in principle, acts the same: it allows consumers to securely store debit and credit card information (whether a MasterCard, Maestro, Visa, V PAY, American Express, Discover card) in their virtual wallet, only to be 'unlocked' and used by its legitimate owner. MasterPass does allow consumers to store multiple cards (debit, credit) and to store multiple shipping addresses. In foreseeable future card driven loyalty programmes (from banks, retailers) could be used through the MasterPass wallet as well.
How MasterPass works: Consumer perspective
When shopping online at a merchant accepting MasterPass, the consumer uses the 'Buy with MasterPass' button. This button already appears early in the checkout process and before address information is required or the payment method needs to be chosen. The consumer is directed to the secure environment of their bank servicing the MasterPass wallet, 'unlocks' it and clicks or taps the card and shipping address they would like to use. They then confirm the order and payment by using the merchant's checkout button. As normal, the consumer receives instant feedback whether or not the payment was successful.
Author: Erik van den Heuvel, About-Payments, April 9th, 2014