masterpass-checkoutMany have known this time was coming for months. Analysts have been saying it over and over again. At some point, the credit card issuers are going to get tired of cutting in third party vendors to their part of the credit card pie. The way to eliminate these third party vendors is for the credit card issuers (ie: Visa, Mastercard, American Express and Discover, and not their branded banks) to develop their own in-app payment system.




Mastercard has done just that and released it here in Barcelona during Mobile World Congress. MasterPass in-app payments will let users make transactions from within any mobile app and then check out using their MasterCard information, on an app owned by Mastercard where their data is stored on servers, also owned by Mastercard.

This is all done under the guise of mobile security, and of course it is a much more secure way to handle credit cards. Especially at times when people have been vulnerable to attacks at Target, Neiman Marcus and the University of Maryland, safety and security is priority one. Priority two though has got to be both keeping payments lower for customers and eliminating third party providers.

While many are familiar with the likes of Paypal, Verisign and other payment conduits, there are a number of lesser known in app payment vehicles, especially across the Android platform, that can be confusing to users and of course less safe. Keeping everything under the MasterCard umbrella puts an extra layer of safety and comfort for credit card customers.

Ed McLaughlin, Chief Emerging Payments Officer at Mastercard said in a statement: “We’re developing a framework to make all payments using MasterPass as or more secure than anything we can do on cards today, ensuring that consumers can benefit from the highest possible levels of security,”

Forbes Digital Commerce and Starbucks Australia are among the first app providers to implement the MasterPass system and expect it to roll out in Q2.

The infographic below details how Masterpass will work: