In another step toward standardizing contactless payments, MasterCard and Visa have agreed to use MasterCard’s PayPass ISO/TEC 14443 specifications. The agreement could also mean other credit card companies may join the parade.
“The agreement means that cards and terminals supporting MasterCard and Visa contactless payment applications will conform to the same communications protocol and undergo equivalent testing,” said MasterCard’s Christina Rae. The two “will use common radio frequency protocols already used by MasterCard for contactless payment cards that consumers wave by or tap on readers.”
The move is also designed to “support our member banks and merchants by agreeing upon common standards for contactless payment,” said Visa’s Sue Gordon-Lathrop. “It doesn’t serve any purpose to compete on technology. Rather the competition comes with the products and services based upon technology. By providing a common protocol it helps to insure that cards work consistently globally.” The common protocol also makes it easier for issuer and acquirers/merchants to develop contactless solutions, she added.
“As with the work we have done with EMV, the purpose of reaching agreement on a common protocol is the first step to standardizing contactless payment,” said Ms. Lathrop.
Cards and terminals supporting MasterCard and Visa contactless payment applications will conform to the same communications protocol and undergo equivalent testing, according to the two companies.
“The common contactless payment protocol will enable vendors to streamline product development and testing, leading to reduced implementation costs and faster time to market for financial institutions,” said Ms. Rae. “It will also give merchants the assurance that a single point of sale terminal will support multiple payment brands and will require less time for terminal programming and testing.”
It also aids merchants. “Agreeing to one common standard benefits all in the value chain,” said Ms. Rae. “Now, merchants and terminal vendors can invest and deploy contactless devices, knowing they will only have to develop and support one communications specification, making the manufacturing process easier and less costly.”
“Supporting a single common protocol will further accelerate the migration towards electronic payments, and deliver more payment choices to consumers.” said Gaylon Howe, executive vice president, Global Product Platforms for Visa International.
What about credit cards from other companies, such as American Express’ ExpressPay? “American Express, which has its own contactless card, was not involved in the agreement, but they may agree to use the format at a later date,” said Ms. Rae. “MasterCard would be receptive to approaches from other payments associations interested in adopting the PayPass ISO/IEC
She said it is also MasterCard’s intention “to use the protocol world-wide for all contactless programs. The U.S. rollout of MasterCard PayPass uses the implementation protocol, as do various trials and pilots springing up around the world, notably in Asia/Pacific.”
But she cautioned that this agreement between MasterCard and Visa “only covers non-competitive aspects of the payment process. It is comparable to the long-standing agreements within the card industry that ensure all magnetic stripe payment cards can be used at the same terminals.”