Sunday , December 8, 2024

Despite Brand Power And a Promising Start, MasterPass And V.me Face ‘Uphill Battle’

Consumers shopping at apparel retailer J.Crew Group Inc.’s e-commerce site now can use MasterCard Inc.’s MasterPass digital wallet, marking yet another merchant signing on to the program. In October, retailers Beyond the Rack and PC World and travel companies LastMinute.com and Porter Airlines also began offering MasterPass on their Web sites.

Both MasterCard and Visa Inc., with its V.me service, offer digital wallets. MasterPass works online and in stores, while V.me is online only. MasterCard says more than 20,000 merchants accept MasterPass. Visa lists on the V.me Web site 58 retailers that accept V.me, and that it works with 64 financial institutions. MasterPass debuted in February and V.me in November 2012.

Visa says V.me will evolve. “Over the long-term, the solution has to encompass all commerce, whether in-person, on a computer or using a mobile phone and it must be as simple, fast and secure as the plastic 'swipe' that we all so frequently rely on,” a Visa spokesperson says.

These are early days for the payment-brand digital wallets, says Rick Oglesby, senior analyst at consulting firm Aite Group LLC. “These are very much concepts under development in a market that has several more established competitors,” Oglesby says. “The largest players in e-commerce are Amazon.com Inc. and eBay Inc., and they already have their own solutions. The largest players in digital commerce are Apple Inc.’s iTunes and Google Inc.’s Google Play, and they have their own solutions.”

Additionally, merchants are working on Merchant Customer Exchange, a mobile-payments payment endeavor backed by Wal-Mart Stores Inc., 7-Eleven Inc., Lowe’s, and other merchants, Oglesby says.

“MCX has wrapped up several of the world’s largest merchants into deals that inhibit them from working with third-party wallets,” Oglesby says. “Visa and MasterCard therefore have a big uphill battle in the e-commerce space, and they haven’t revealed their point-of-sale strategies,” noting the others have tried and have faced difficulties.

The behemoth digital wallet is eBay’s PayPal, which has about 137 million active accountholders, and is striding to be a payment option online, in stores and on mobile devices.

“It took 15 years for PayPal to get where they are, and PayPal did it with support from a rapidly growing eBay,” Oglesby says. “Visa and MasterCard are at the very early stages, have a long way to go, and they have some significant disadvantages to overcome.”

MasterCard provided few details about its plans for MasterPass beyond enabling online and in-store checkout services, the wallet itself and potential services such as a loyalty program, the ability to check account balances and receive alerts.

Visa says it's pleased with the progress it's made. To date, it has V.me deals with more than 100 issuers in the United States and Australia. Visa also says it expects to add nearly 300 mechants to V.me in the next few months, boosting the current tally from more than 60.

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