ROOM 6 - PAYMENT SYSTEMS

MasterCard PayPass

Speaker:

Murdo MunroVice President, Mobile/Wireless, MasterCard International

© MasterCard International Incorporated

Agenda

• Our Vision• MasterCard® PayPass™

• Consumer & Merchant Propositions• Pilot / Trial Results • Technology Evolution • Deployment

© MasterCard International Incorporated

• Consumers with a MasterCard branded payment account will be able to choose where, when and how they transact

• This choice will be determined by simplicity, convenience, security and the consumer’s lifestyle preferences

• Mobile / wireless technology & platforms will be key enablers of this vision

Our Vision

© MasterCard International Incorporated Source: GMAPS, ES Reports, Forrester Research 2002, SPG analysis

61% of consumer payment is still conducted with cash and checks

Driving Cash to Card

© MasterCard International Incorporated

ISO 14443RF Reader/

POS Acquirer

• RF chip in ISO standard card contains account data needed for transactions

• Once account data read by proximity reader, data processed as a normal transaction.

• Alternative form factors, card hybrids, fobs, mobile phones, etc.

1mm to 10 cm

MasterCard PayPass

© MasterCard International Incorporated

• ISO/IEC 14443 Implementation Specifications

• PayPass Technical Specifications• Cards - supply chain enabled• Terminal/Reader - supply chain enabled• Testing (Procedures & Tools) – Full

range• Issuer, Merchant & Acquirer

Implementation Guides & support• MasterCard Marketing support

Complete Solution

© MasterCard International Incorporated

• ISO/IEC 14443 expected to be mature standard

• MasterCard discovered ISO14443 not fully defined

• MasterCard developed implementation spec. including test strategies & tools

• MasterCard now has PayPass ISO/IEC 14443 Implementation Specification

PayPass ISO/IEC 14443 Implementation

© MasterCard International Incorporated

ISO 7810 Magnetic

Stripe Card

Non ISO Magnetic

Stripe Card

ISO 7810 Card

w/ ISO14443 RF chip & antenna

Non-Card form

w/ ISO14443 RF chip and

antenna

ISO 7810 Card w/ EMV & ISO14443RF chip &antenna

The FutureOf

Payments

Evolving The Way We Pay

© MasterCard International Incorporated

• Quick and easy alternative to cash:• No stopping at the ATM• No fumbling with change• Nearly 50% of consumers now carry less

than $20 in their wallet• Faster in and out, and quicker on their

way• Better record keeping than cash• Increased feeling of security• It’s cool to use

“I just ordered and waved my

card--it was that easy!”

“Cash is a thing of the past”

“The card never leaves my hand”“

“I had people behind me saying, oooh, you’re paying with a

phone…cool, how do I get one?”

MasterCard PayPass – Consumer Proposition

© MasterCard International Incorporated

Increased

Profitability

No signaturerequired

10% faster than cash

Full ChargebackRights

PayPassAcceptance

MasterCardAcceptance

MasterCard QPS Program

IncreasedSpend

Tap-N-GoFast Thru-Put

IncreasedAverageTicket

MasterCardPromotionsAdvertising

Less CashLess Risk

Program Results

PayPass OnlyTerminals Less maintenance

New locations

More purchasesLess Cash

Lower cost per unit

BenefitsFeatures

MasterCard PayPass – Merchant Proposition

© MasterCard International Incorporated

Orlando FL (2003)Orlando Metro Area• 11 POS solutions• 15 vendors

Dallas TX (2003)Nokia Campus / McArthur Blvd• 4 POS solutions• 8 vendors

Purchase NY (2002)MasterCard Campuses• 3 POS solutions• 6 vendors

MasterCard PayPass – Tried & Tested

© MasterCard International Incorporated

• Increase in spend• Intuitive consumer interface • Robust and reliable readers (terminals) • Technology works in the “real world”• PayPass can save 8 to 12 seconds at drive-thru• Merchant and Customers perceive PayPass most

significantly faster where no signature required, e.g. QPS merchants and gas pumps

Pilot & Trial Results

© MasterCard International Incorporated

RFID readers• Multiple versions or

interpretations of ISO14443

• Multiple designs• Different consumer

interactions

MasterCard Requirements• Globally accepted and

interoperable• Easy for consumer to:

- use, recognize and understand

The Solution• Unique - not funky• Standardized landing

zone / sweet spot• Visual and audible

indicators

Terminal / Reader Evolution

© MasterCard International Incorporated

PayPass exclusive Multifunctional PayPass terminals

PayPass exclusive - attached

Current Terminal Examples

© MasterCard International Incorporated

PayPass can be implemented as:• Traditional Card with innovative design• Companion key fob or customized Tag• Companion application on a cell-phone

Card / Device Evolution

© MasterCard International Incorporated

NFC• RFID Chip + Reader [ISO 18092]• Functions as ISO 14443 Type A for PayPass• Secure Storage Chip• Multi-app operating system• Secure Over-The-Air download capability• Simple User Interface

MasterCard PayPass on a Phone

© MasterCard International Incorporated

• MasterCard will additionally support merchant private label and stored value programs by licensing the PayPasstechnology, provided:• All locations accept MasterCard PayPass, as well as

merchant’s own PayPass powered product• Merchant’s mark limited to their own acceptance

locations• Consumer devices also contain a “Powered by

MasterCard PayPass indicator

PayPass Licensing

© MasterCard International Incorporated

2003

• Orlando Market Trial with MBNA, Chase, Citibank

• NOKIA handset trial in Dallas

2004

• NYC - Chase Bank Employee launch

• McDonalds US national roll-out

• Orient Corp. Trial in Japan• Motorola Handset Trial• PrePaid PayPass with

Peoples Trust in Canada• MasterCard OneSMART

PayPass• Bank of Philippine Island

PayPass Pilot• MasterCard proffers

contactless symbol to industry

2005

• Sheetz - convenience chain accepts PayPass

• Southern Taiwan Kaohsiung Government transportation project with MasterCard OneSMARTPayPass Combi Card.

• MasterCard PayPass football stadiums

• Baltimore Ravens• Seattle Seahawks• Philadelphia Eagles

MasterCard PayPass Momentum

© MasterCard International Incorporated

• Target cash and quick payment service merchants• Align with planned merchant POS upgrades • Minimize card and back-office costs• Support credit, debit, private label, and proprietary

stored value• Provide multiple MasterCard PayPass form factors• Get cards / devices into consumer’s hands• Get them to use it instead of cash

MasterCard PayPass Deployments

© MasterCard International Incorporated

Contact

Murdo MunroVice President Mobile / WirelessMasterCard InternationalTel: +44 207 557 6809Email: murdo_munro@mastercard.com

Or

Email: paypass@mastercard.com