Rogers and MasterCard: Where mobile payments are headed

I’m not sure if this is just a guy thing, but when I recently purged my wallet I was kind of embarrassed by what was in there. Old cab receipts I should have expensed. Foreign currency from countries I won’t be visiting again for quite some time. Loyalty cards for companies to whom I am no longer loyal.

If that’s what a physical wallet ends up looking like, just imagine the debris that will be floating around in the mobile version.

This week Rogers expanded its foray into mobile payments with SureTap, an app that will let users load up prepaid MasterCards and other gift cards on their smartphones that have near-field communication, like Samsung’s S4 or the BlackBerry Z10. Last year the carrier jumped into this space with CIBC to enable mobile transactions of up to $50. With SureTap, a signature will authorize even higher payments but it will also offer a wider range of transactions.

“When we looked at this, we decided that enabling payments is great, but let’s enhance that experience,” says Jeppe Dorf, vice-president of transaction services with Rogers. “What if offers come with not just a discount on a product but also a number of loyalty points that are updated? In the physical world, there is no connection between the loyalty card in your wallet and the coupon you clipped out of the paper. We’re trying to create a connected experience rather than a fragmented experience.”

The array of mobile payment providers is quickly becoming dizzying, but Dorf provides a very useful distinction. There are the remote payment providers, like PayPal, which run everything in the cloud and are accessible via smartphones but not necessarily “resident” on them. Rogers’ SureTap is more of a “proximity” payment solution, Dorf said, where you’re taking the kind of transactions you normally managed via a MasterCard and move it onto your phone.

According to Will Gilles, vice-president of emerging payments at MasterCard Canada, these two parallel streams can be confusing to customers, and the long-term coal is to converge them. The adoption is also influenced in part by the staged availability of partners and phones. The Rogers and CIBC app, for example, was taken up by a subset of the bank’s customer base who happened to use the right handsets.

“Before long you have a pretty narrow funnel,” he says. “What we’re focused on now is widening that out: adding another telco, adding another bank, adding more devices. We’re already seeing that start to happen.”

It will obviously take some time for consumers to understand these kinds of experiences are even possible, but once they do they’ll need to decide who they want to help manage their mobile wallet. This is the other big difference from the physical world. With a traditional wallet you pull out the bills or cards and it’s up to you to keep track of the transactions. Mobile payments add convenience but also introduce a third party into the mix between buyer and seller. It will have to be someone you trust, not only to provide a great initial service but to meet your needs over the long term.

Square CEO Jack Dorsey has said commerce is a conversation, but it might be better to describe it as a story. It’s not so much about what’s said but what about happens. The companies that will win in the mobile payment space will be the ones who ensure those stories get told simply, without interruptions, and without a tragic ending.