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MasterCard unveils secure-payment prototypes for 2016 delivery

Matt Hamblen | Oct. 28, 2015
MasterCard on Monday unveiled secure payment prototypes in the form of rings, wristbands and car key fobs after working with NXP and Qualcomm to develop the chip-level technology.

mobile payments ring
MasterCard announced prototypes of devices like this smart ring from Ringly that can enable payments at a subway station or elsewhere. Other products include key fobs and wristbands, and MasterCard said any accessory, wearable or device can be payment-enabled. Credit: MasterCard

MasterCard on Monday unveiled secure payment prototypes in the form of rings, wristbands and car key fobs after working with NXP and Qualcomm to develop the chip-level technology.

Products are expected to roll out in 2016 in the U.S. Capital One was named as the first credit card issuer to back the program.

"As more and more 'things' become connected, consumers will have endless possibilities when it comes to how they pay and will need all their devices to work seamlessly together," said Ed McLaughlin, chief emerging payments officer at MasterCard, in a statement.

A new MasterCard video shows a model making a secure payment for coffee in a shop with a wristband, then using a ring to pay for a subway fare at an entry gate and, finally, a key fob to buy groceries at a grocery point-of-sale terminal. The video showcased a smart wristband from Nymi, a smart ring from Ringly and a key fob from GM. Other partners named included clothing designer Adam Selman as well as Bluetooth locator device maker TrackR.

TrackR so far has made devices that use Bluetooth connectivity to help users find lost items. Most of the MasterCard prototypes shown Monday rely upon Near Field Communication (NFC) technology. One MasterCard demonstration during its announcement at the Money2020 conference in Las Vegas showed a dress that had several NFC chips attached.

MasterCard's security is based on dynamic tokenization technology in which a user's 16-digit credit card number is replaced with a unique alternate card number or "token," which can be used for mobile point-of-sale transactions as well as online purchases. There is usually also a one-time code generated by a chip in the wearable for each transaction that adds to the security.

Wearable payments promise to be much more secure than chip cards now being distributed by banks because of the unique token tied to each user. Tokens "are much more secure technology than a PIN, which is easier to steal," explained Gartner analyst Avivah Litan.

Analysts said that the market opportunity with wearables for banks and card companies is promising. "Every company will or already is competing on this approach," Litan said.

"MasterCard wants to extend commerce to anything with an Internet connection, and the Internet of Things presents an opportunity for banks to expand their addressable market," said Jordan McKee, an analyst at 451 Research, after attending the MasterCard event.

 

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