MasterCard dives into in-app payments with its MasterPass platform

BARCELONA — Today at Mobile World Congress, the annual gathering of mobile bigwigs, MasterCard launched in-app payments for its MasterPass digital payments platform, providing third-party app developers with a framework to accept payments for goods within their mobile apps, without requiring consumers to store their credit card information inside of the app.

MasterPass launched MasterCard into digital payments, and now that experience has been extended to mobile. In addition to being able to pay for goods by tap, click or touch at checkout, with MasterPass now consumers can pay for goods directly from inside enabled mobile apps. Forbes Digital Commerce, Fat Zebra, MLB Advanced Media, NoQ, Starbucks Australia and Shaw Theatres Singapore are the first developers to use MasterPass to power their in-app purchases.

MasterCard also announced its plans to acquire C-SAM, a leading provider of mobile wallet and on-device software and services, which it hopes will help increase the speed of development and global deployment of mobile wallets and payment solutions. The companies did not disclose terms of the agreement, and closing is subject to regulatory approval, which is expected sometime this quarter.

With MasterPass, MasterCard believes that users will benefit from a more streamlined payment experience that eliminates the need to type in and store credit card numbers inside multiple apps. Ed McLaughlin, Chief Emerging Payments Officer at MasterCard explained in an interview:

We’re in the midst of a generational change where everything is moving from off line and disconnected to connected devices… We think every device is going to be a commerce device. What we’re doing [with MasterPass] is providing an operating system for digital commerce.

These announcements sound exciting for both developers and consumers. What is not immediately clear is how Apple and Google will respond to MasterPass’s extension into mobile apps, particularly if it makes it possible for developers to in any way circumvent the 30% per transaction fee they’ve historically paid for in-app purchases.

McLaughlin feels that MasterPass is “additive” to what Apple and Google are already doing with digital media and content payments. “The Apple Store, Google Play and other things like that are being used for digital media and content, and we think that’s great, and [for MasterCard users] all of [those transactions are] ultimately settled up against your MasterCard,” he said. “What we’re now seeing is that a lot of the merchants are now adopting apps – especially shopping apps. So, really this is now an alternative to going to the register to pay and shopping through the application for that.”