Weve and MasterCard mobile wallet aims to get 'cash out the system'
Weve, the mobile advertising and payments joint venture between the UK’s three largest operators has formed a partnership with MasterCard to bring contactless payments to mobile phones via banking brands’ existing apps - a move they hope will ‘get cash out the system’ and enrich the mobile experience.
The agreement means 80 per cent of consumers in the UK will have access to this mobile wallet technology by early 2015 when it is set to go live, the companies say.
EE, Vodafone and O2 customers will be able to use their existing banking apps to link the SIMs inside their phone with their Mastercard accounts if their phones are NFC enabled. After setup, they will be able to use their phones - even if they have run out of battery - to pay for items by waving their devices over compatible terminals inside shops. The two have yet to announce any banking partners.
Marion King, MasterCard UK and Ireland president, told Marketing Week at the launch event of the service in London this morning (6 February) that signing banks up to partner the service is still a “work in progress”.
Once they do, marketing for the mobile contactless payment technology will vary by institution but MasterCard will provide collateral and online marketing, as it has previously done in partnership with banks for contactless card payments, King said.
David Sear, Weve CEO, told Marketing Week operators will market the technology in a “very personalised” way to consumers, given the fact that they have data on the types of mobile phone and banking apps their customers own.
A study from YouGov released in December last year found just 9 per cent of mobile smartphone owners know their devices are NFC-enabled and only 22 per cent of those respondents had ever used the functionality. It has been said that concerns over security and a lack of understanding - and appetite - for using their mobiles to make purchases are holding back the growth of contactless payment.
By contrast, recent research conducted by Weve found 70 per cent of consumers want mobile payments in retail, “before they even really know what that is” Sear said, adding that this demonstrates consumer appetite for the service.
King said contactless payments via cards increased by 210 per cent year on year in 2013, with consumers in UK, Poland, Italy and Turkey driving the growth.
She added: “We are starting to see a growing appetite for contactless. It’s come from a relatively low base, but to double in a year across the whole of Europe is great and the opportunity is huge.
“What MasterCard brings is technology to enable a MasterCard to be enacted on a phone - not just at a store value, which is something that isn’t in the market today. Our priority is to get cash out of the system. In the UK 60 per cent of transactions are cash and we want to move that. This isn’t a big revenue play, it’s about driving volume and usage.”
Sear would not comment on the percentage share of transaction revenue Weve would take from purchases made using the technology, but said the service was more about creating a “more immersive mobile experience” for its shareholders and consumers.
He added : “I think everybody that works in [the payments] market that we’ve spoken to has said the challenge is simplicity. If Weve and other players can help reduce that barrier this all becomes something much more appealing.”
It is not yet clear how Weve and MasterCard plan to bring the service to iPhone users, as those devices are currently not NFC-enabled. iPhone had a 29.9 per cent share of all smartphone sales in Great Britain in the three months to December 2013, according to Kantar Worldpanel ComTech figures.
Last month Weve launched a display advertising service, with Tesco the first advertiser to join its beta trial.
Weve is set to make an announcement about its mobile loyalty offering next week.