MasterCard said today it will let third-party developers tap into its payment systems, so they can be used for online or mobile applications. By opening up its services, the credit card company becomes more competitive in the next generation of platforms, which are the target of more than a dozen or so start-ups that have raised millions of dollars to make paying by cell phone more ubiquitous.
Through the program, developers will be able to bypass having to get a merchant agreement, setting up the system and making the consumer enter data each time. Instead, developers could use the new open platform to embed a payment feature in virtual games or in e-commerce apps on Twitter or Facebook, or to build an app that sends a text message to the card’s owner before a purchase is made, The New York Times reports.
Internally, MasterCard has been using the APIs in-house to create iPhone applications, such as MasterCard ATM Hunter and MasterCard Easy Savings, but Garry Lyons, MasterCard’s Group Executive of R&D, said: “Opening these and other APIs to the global development community developers will provide developers the opportunity to leverage MasterCard’s leading payment platforms and come up with new ideas that may not have been previously considered or thought possible.”
In the Times article, MasterCard says that while mobile payments for digital goods has started to take off, “it’s still really hard to buy a physical item from your phone.” Last week, we wrote about how phones are not a practical replacement for cash because of 40 to 50 percent cut a carrier demands if the charge appears on the cellphone bill. Other limitations have revolved around the hardware, and having compatible payment scanners in the store with chips in the phone.
MasterCard is not the only one shifting their approach. PayPal opened its platform late last year, and other start-ups like mopay, Zong, Boku and Paris-based Hi-media, are hopeful they can transition from mostly digital goods to physical goods over time. Interested developers should contact MasterCard at [email protected] in order to learn more on how to participate in the program.