Visa and Mastercard may compete strenuously for business, but today they’re announcing a collaboration in the mobile wallet sphere.
The two companies issued simultaneous announcements today describing how Masterpass and Visa Checkout can just get along. In case you’re wondering how the annoucements compare in their treatment of their competitors, we’ve reproduced the first mentions below.
Mastercard’s doesn’t mention Visa until the end of the fourth paragraph. Visa takes a softer line and mentions Mastercard in the third paragraph, which is here:
Today, we are pleased to announce we recently signed an agreement with Mastercard that will accelerate the adoption of payment tokens in Visa Checkout and Masterpass. The reciprocal tokenization agreement allows Visa to request tokenized Mastercard payment credentials from Mastercard for provisioning into Visa Checkout, and Mastercard to request tokenized Visa credentials from Visa for provisioning into Masterpass. By allowing each network to request tokenized payment credentials from the other network, this agreement will ensure that each network’s wallet solutions can continue to stay open to other card brands while also adding the extra security of using tokens in place of real card numbers.
And here’s Mastercard’s:
This past summer, Mastercard started to tokenize Mastercard credentials into Masterpass, our flagship wallet service that can be customized by issuing partners for use by consumers anywhere they want to shop –in store, online and in app – using their smartphone, tablet or PC. The Masterpass vision is to support all forms of commerce to address the full range of merchant experiences and consumer needs. And as part of this vision, we created Masterpass as an open wallet enabling card-issuing banks and consumers to store their Mastercard-branded cards as well as those they have that are issued on other networks, including Visa.
To continue to drive the wider adoption of tokens – an effort supported by both our bank and merchant partners – we recently signed an agreement with Visa that will accelerate the adoption of tokens in Masterpass and Visa Checkout. The reciprocal tokenization agreement allows Visa to request tokenized Mastercard payment credentials from Mastercard for provisioning into Visa Checkout, and for Mastercard to request tokenized Visa credentials from Visa for provisioning into Masterpass.
The move echoes the parallel deals the networks struck with PayPal in September. Holders of both kinds of cards can use the other’s mobile wallet infrastructure to pay more securely online. This is good news for issuers, who value ubiquity for cardholders above all else. It’s also good for merchants and consumers, the networks argue, because when paying, everyone wants it all to work everywhere, all the time.
Tokenized payments have become commonplace (not that consumers know it) with the increasing use of EMV or chip cards at the point of sale. But when shopping online, consumers still type in their card numbers and expiration dates, and sometimes their CVV — but it’s all static, untokenized.
Wallets, such as Android Pay and Apple Pay — with built-in tokenization, proliferate, tokenized payments — are more common, but are still far from the norm for e-commerce. Shoppers checking out now online can be faced with a bewildering array of options to check out more quickly — but it’s still better than sending an untokenized card number zipping across the ether.
Ok, the lovefest is over. Visa and Mastercard will now resume fighting over customers.