Mastercard and Verizon on Tuesday announced a partnership focused on 5G contactless payments for consumers as well as small and medium businesses.
They hope to have some innovations from the partnership by 2023.
The collaboration aims to enable businesses to use emerging payment technologies to turn smartphones into cash registers, to turn wearable devices like watches into payment devices, and to facilitate contactless retailing similar to Amazon Go stores.
“A large retailer can easily do this. A small business, how are they going to do it? That’s exactly what it will bring; 5G allows us to deliver a full experience,” said Michael Miebach, CEO of Mastercard, to CNBC, ahead of the announcement. . “For example, I pick an item from a store, but they actually don’t have the color I like. So I’m going to get him sent home, and he’s going to be paid when he gets there, it’s all coming together and we, with 5G, are going to allow that. “
“5G will allow small and medium-sized businesses to run transactions faster and focus on what they’re actually delivering to customers,” Hans Vestberg, CEO of Verizon, told CNBC. “You can use 5G to create smoother ways to transact with your customers and focus on your business. This is of course what we are seeing with contactless stores and exiting Covid, I think we are seeing a lot more. contactless because it’s part of our society today. “
The Mastercard-Verizon partnership seeks to further digitize and disrupt global consumer spending at retailers and other merchants, which the payments giant estimates at around $ 50 trillion a year. The Mastercard and Verizon teams will be integrated into the Mastercard technical center in New York and will work on additional applications for the 5G alliance.
The use of the Internet of Things and Mobile Edge Computing in retail are two additional applications that will be explored by teams at Mastercard’s Tech Hub. MEC enables cloud computing and other online capabilities at the edge of an Internet network.
“We bring the computation and storage of data closer to you as a consumer, it means you can get a service faster, it will be more secure because it is closer to you. Some data has to be very close, some data can be very far away, ”Vestberg said. “It can be in any industry, but a very good use is the financial industry, as transactions need to be very secure.”
Miebach believes that small and midsize businesses will be the biggest growth area for 5G contactless payments and that the increased computing power has the potential to grow their businesses.
“As a small business owner, you need to compete more digitally than ever. You might have been brick and mortar before, ”Miebach said. “Let’s say you’re in a restaurant, you’ve tried curbside pickup, and now want to run the business on both channels. It’s a better experience but at the same time it will lead to more revenue for the merchant, lead to more revenue for an issuing bank that issues a credit card as well as for us. “
“There is also more scope in new types of payments,” he added. “At the end of the day, the way I see it from our businesses, we are building a long term market to grow in.”