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  • E-Commerce & E-Payment
  • Payment
  • United States

e-Payment: Mastercard Launches Digital Wellness

FACTS

  • The US payment scheme Mastercard unveils the Mastercard Digital Wellness programme, along with various technologies for revisiting e-payments’ authentication phase.
  • Goals: enable businesses, especially small merchants, to feature seamless and secure e-payment processes for their customers, including click-to-pay checkout.
  • In line with this programme based on EMVCo specifications, Mastercard will be proposing a single account, accessible using an identifier (the customer’s e-mail address) and password (prior to the payment step). This account will act as a universal entry point for accessing all partner sites.
  • Partners: Mastercard is working with companies such as Worldpay, Square, Adyen and Stripe to rollout this solution.
  • How it works
    • Upon completing his purchases, the customer specifies his identifier.
    • He may then validate his payment in just one click for processes complying with EMVco specifications.
    • In the background, Mastercard will be implementing AI and Machine Learning-based algorithms to confirm the customer’s identity.
    • A tokenisation mechanism will also be implemented to avoid that sensitive data should be transmitted.
  • Benefits:
    • Increase approval rates
    • Cut down fraud rates
    • Reduce PCI compliance burden
  • This programme will first be rolled out in the US. The one-click payment solution will be made available for US cardholders and merchants as of Q3 2019.

CHALLENGES

  • A new opportunity. According to a recent study by Stripe, the impending cost of implementing stronger security principles required by PSD2 could end up amounting to €57 billion. This cost could induce revenue losses, due to more tedious customer processes and poor communication on strong authentication principles.
  • This potential threat, also identified by large-scale merchants –including Amazon–, stresses a need for e-merchants to remodel customer processes. This need opens new opportunities for companies like Mastercard.
  • A lever for increasing customer loyalty. Besides security-related skills and consideration of the EMVCo standard, businesses involved in this new programme will have access to different tools for mitigating online attacks. And they will also be provided access to the Cyber Readiness programme for improving staff members’ awareness of phishing risks and authentication issues.

MARKET PERSPECTIVE

  • In 2017, Mastercard bought out NuData Security, a technology company focusing on online fraud prevention. They now rely on their AI and Machine Learning technology to assist corporate customers with preventing fraud.
  • Just like Mastercard, other industry players intend to help merchants through streamlining the implementation of stronger authentication steps. Two months ago, the Californian FinTech Stripe introduced new features for e-merchants and announced their buyout of TouchTech Payments.