Although the United States is considered to be a global leader in finance and technology, the country has strangely been a laggard in the realm of digital payments. According to John Lambert, executive vice president at payments giant MasterCard, the American system of retail banking and payments is in dire need of adopting a set of standards to help it move in the right direction.
Lambert recently announced that his company is serious about the future of digital payments; to this effect, MasterCard has issued a call to action that will hopefully inspire the major tech and finance players to work together and establish a common framework for digital payments. This call to action includes four principles for establishment:
1 – Accessibility
2 – Privacy
3 – Security
4 – Transparency
The materials and foundations to completely modernize the payments industry have been available for a few years, but the efforts to create digital wallets and major networks have failed to take hold. In the retail world, more than 90% of purchase transactions are still being settled at the point of sale via cash or with credit and debit cards. This preference extends to the online world, where transactions are rarely settled by means of digital wallets.
MasterCard believes that digital payments should follow the path of Apple Pay, the first digital wallet that was not solely dependent on being linked to credit or debit cards. The network has taken a first step with MasterPass, a digital wallet system developed with the aforementioned four principles in mind. The network is not calling on the payments industry to copy its wallet; the goal is to stimulate developers into creating similar solutions that can be easily adopted by merchants and shoppers alike.
The current landscape of digital wallets and payment solutions in the U.S. is too disjointed when compared to various Asian and European systems. The payments industry could clearly benefit from a coordinated call to action to create consistency and consolidation.