Get Rid of Your Wallet, The Future of Money is Here: Mobile Payments from Mastercard

Last Thursday, I had the opportunity to attend MasterCard’s Media Day event in NYC. The invitation was rather vague as to what to expect, though I did know that it concerned mobile payments. What shocked me was that this wasn’t some test demo of a future technology—MasterCard has teamed with Google’s Wallet software, Citi credit cards, and Sprint’s phone network to put together live shopping experiences that we can expect to actually be using in a few weeks. This holiday season, most of us will be pulling out wallets stuffed to the brim with receipts, coupons, wish lists and more. But if you’ve got a supported phone with NFC technology on Sprint, then you could be tapping your cell phone all over the place, making everyone else look distinctly 20th century.

So, what did I see at MasterCard’s event? The first few purchasing experiences I undertook were not significantly new experiences. In fact, you’ve probably already seen the Pay Pass terminals at places like McDonalds and Best Buy. Maybe you’ve even used a Pay Pass enabled credit card and tried to pay by magically swinging your wallet near the terminal instead of pulling out your card. Chances are, though, if you tried this, you had the same experience I did: the cashier asked to see your card, so you still had to physically handle your credit card just like every other transaction.

What’s new is that now your credit card is just another item in your Google Wallet, an app for Android phones that stores not just your card, but things like loyalty and rewards cards, as well as offers and discounts from Google’s recently-launched Offers service (see our previous coverage). This ‘smart wallet’ may seem like it contains a virtual credit card, but that card is just as real as the one in your real wallet, with all the security features you’re used to including protection against fraudulent charges.

In a way, it might even be more secure. In a suite of software MasterCard has put together, we were able to make live changes to the way our cards worked, setting alerts for overspending in certain categories (like Entertainment or Groceries), warnings when your card is being used abroad (a coffee shop set up at the event was, for all intents and purposes, in Canada, so we actually got to test this live), and more. The app was simple to use, but powerful: every setting changed reflected a live change on MasterCard’s servers which actually affected how the card would function. One representative I spoke to even told me that, depending on the settings the bank issuing the credit card decides to offer, you could set your card up to automatically deny charges depending on certain conditions (like sudden, unauthorized, out-of-country spending).

Overall, I left the event with a very positive impression. While using your phone as a credit card may seem scary as first, once you start using it you quickly realize how convenient it can be. Plus, now that the novelty of having smartphones and their always-on data connections is starting to wear off, it’s a way to feel like you’re living in the future. Now if only we could get electronic drivers licenses…