Financial services giant Mastercard and cellular network provider Verizon announced Tuesday plans for a partnership that would facilitate 5G contactless payments for consumers and small- and medium-sized businesses. By 2023, the two companies hope to create a fully touchless retail experience by using smartphones, smart watches and other personal devices as points of sale.
While larger businesses have long had the resources to bring in contactless payment solutions, the partnership between Mastercard and Verizon may help to level the playing field for small- and midsized retailers.
“A large retailer can easily do this. A small business, how are they going to do it? That’s exactly what this will bring; 5G allows us to deliver the full experience,” said Mastercard CEO Michael Miebach on CNBC.
Innovating for the future
Mastercard and Verizon plan on harnessing the Internet of Things and near real-time edge computing to digitize global consumer spending at retailers large and small in a variety of ways, including:
Turning smartphones into payment acceptance devices.
Using Verizon’s mobile edge computing, which extends cloud capabilities, to reduce hardware used for autonomous checkout.
Deploying Mastercard’s Digital Doors curriculum to help SMBs with digitization.
Bringing Mastercard’s Bill Pay Exchange to Verizon customers to enhance the bill pay experience.
Just last year, in-store mobile payments increased by 29%. And with contactless payments expected to be used by more than half of U.S. smartphone users by 2025, the Mastercard-Verizon partnership will aim to help the fintech, banking and payments industries innovate for the future.
“Critical components of long-term success are the ability to remain agile and align with strategic financial and payments partners that have the tools and capabilities to drive industries forward,” said Sampath Sowmyanarayan, chief revenue officer of Verizon Business. “Coupling Verizon’s leading global IP network and transformative 5G technology with Mastercard’s deep industry expertise, leading services and solutions, and a strong commitment to innovate, is a partnership that aligns perfectly with what we are striving to achieve at Verizon and one that can create game-changing solutions.”
Additionally, teams from both Mastercard and Verizon will continue to test and embed 5G solutions at Mastercard’s New York City Tech Hub, aiming to speed up their exploration into the (relatively) new horizons of 5G and mobile edge computing.
“Emerging technology such as 5G and mobile edge computing will undoubtedly reshape how we interact with each other,” said Linda Kirkpatrick, president for North America at Mastercard, “making it all the more critical for these exchanges – particularly payments – to be trusted and anticipate further changes.”
With 5G capabilities, retailers would have access to lower latency, greater bandwidth and security capabilities, and streamlined data rates 10 to 100 times faster than 4G.