Monday , November 23, 2020

Plastic Starts to Take a Back Seat As Mastercard Expands Its Digital Card Program

Mastercard Inc. announced Wednesday plans to expand its Digital First card program in North America by partnering with payment processors to provide guidelines for consumer experience with digital payment cards. 

Processors Mastercard is partnering with include CoreCard Software Inc., FIS Inc., Fiserv Inc., Galileo Processing Inc., i2c Inc., Marqeta Inc., PTS Processing Inc., and Total Systems Services Inc. (TSYS).

Mastercard and its partner processors will work with issuing banks to ensure the foundational requirements of the digital card program are met, the network says. 

Launched in 2019, Mastercard’s Digital First card is downloaded directly to a consumer’s mobile wallet, in a manner familiar to consumers who have adopted Apple Inc.’s card. Card credentials are tokenized each time the card is used to make a purchase. Consumers also have the option of requesting a physical version of the card.

Issuer guidelines for Mastercard’s program focus on four areas: 

  • Enabling consumers to apply online and receive card information almost immediately upon issuer approval;
  • Giving cardholders access to their card information almost immediately to begin making purchases online, in app, and at the point of sale through digital wallet offerings;
  • Quick access to card information, including the 16-digit PAN, CVC2, expiration date, and customer service information, via a digital environment;
  • Allowing cardholders to manage their payment credentials digitally, including access to transaction history and balance information, alerts, and access to card benefits.
Shipper: “There are many hurdles to overcome before we see consumers go cardless.”

“Today, storefronts are at your fingertips, browsing shopping aisles is as easy as swiping left or right, and getting what you want and going where you want is as simple as a click or tap,” Jess Turner, executive vice president, products and innovation, North America at Mastercard said in a prepared statement. “With the Digital First Card Program, we have designed a financial experience that mirrors the lifestyle of today’s generation with simplicity and security as our guiding principle.”

Demand for digital cards is growing rapidly, says Dave Shipper, a senior analyst for Aite Group. “There is a lot of demand for this functionality, and almost every bank or credit union I speak to has digital card issuance on their roadmap,” Shipper says by email. “Digital card issuance allows consumers to receive a digital card instantly when they open an account or if their card is lost/stolen. Imagine losing your card while traveling and obtaining a new card in your mobile wallet instantly. Digital issuance is more than a cool feature; it offers real benefits to cardholders.”

As part of its efforts to expand its Digital First program, Mastercard recently announced a partnership with Samsung Group and Social Finance Inc. (SoFi) to launch Samsung Money by SoFi, a mobile-first money-management service. Fintechs Pay with Privacy and Neo Financial will also launch Digital First card programs in the coming months, Mastercard says.

Despite the growing momentum for digital cards, Shipper doubts the trend is the beginning of the end for traditional plastic cards.

“The physical card is still very important because acceptance at the point of sale is not 100% for these [digital card] payments, and mobile-phone batteries can die,” Shipper says. “There are many hurdles to overcome before we see consumers go cardless.”

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