Mastercard is working with Verizon to use the faster and heavier bandwidth of 5G technology to improve shopping and payments.
The card network and Verizon Business have formed a strategic partnership to collaborate on technology that uses 5G to power autonomous checkouts across diverse in-store and online channels including the internet of things, the companies announced Tuesday.
Working with Verizon, Mastercard aims to move many transactions that are currently hardware-based into the cloud, enabling faster and more immersive commerce that will be available to small businesses along with major brands, according to a press release.
For Mastercard, the move seems calculated to preempt many payments networks and banks that have not widely discussed how 5G may affect their businesses, though Mastercard has made no secret of its 5G ambitions.
Mastercard CEO Michael Miebach described how 5G technology in combination with artificial intelligence can be used to deliver a “hyper personalized” purchasing experience in retail, entertainment and health care, as part of a conference on future technology in May sponsored by The Wall Street Journal.
Mastercard plans to use 5G technology expand the way handsets and other connected devices can seamlessly accept payments, including expanding the availability of the Tap on Phone contactless technology it’s currently piloting that can turn smartphones into payment acceptance devices.
Verizon will also begin working with Mastercard at the payment network’s tech hub in New York City to test 5G for “mobile edge computing” and autonomous checkout including automatic home door unlocking, voice and video ordering and walk-in, walk-out shopping in different types of environments, the release said.
“Through this collaboration, Mastercard and Verizon’s platforms, which connect billions of customers, businesses, banks and governments around the world, will be a force in driving transformational change,” said Linda Kirkpatrick, Mastercard’s president of North America, in the release.
As part of the partnership, Verizon will also join Mastercard’s Bill Payment Exchange to digitize Verizon customers’ bill payments, and Verizon will be able to access the fraud tools of Mastercard’s Ethoca subsidiary to make Verizon bill payments more secure, the release said.
“Coupling Verizon’s leading global IP network and transformative 5G technology with Mastercard’s deep industry expertise, leading service and solutions, and a strong commitment to innovate, is a partnership that aligns perfectly with what we are striving to achieve at Verizon,” said Sampath Sowmyanarayan, Verizon’s chief revenue officer, in the release.
Autonomous checkout has been in the spotlight for the last few years as merchants including Amazon and several convenience stores operators have successfully rolled out concepts enabling customers to just walk out with AI and cameras automatically toting up purchases via apps.
San Francisco-based Standard, a provider of autonomous retail checkout, won $ 150 million in February to retrofit up to 5,000 stores with its AI-driven solution over the next five years.
Verizon is rolling out a 5G service that covers more than 230 million US consumers and tens of thousands of businesses, with plans to reach more by the end of this year.
Payments industry experts have previously said that 5G could be an important tool for enabling payments within self-driving cars and robot delivery services, but because of the fragmented availability of 5G, it will take years to reach consumers widely.
“Transformative payment services using 5G are still a ways off, and at that point payments will need to be integrated into various environments including the IoT,” said Tim Sloane, vice president of payments innovation at Mercator Advisory Group.
But as 5G gathers momentum, it will likely be a disruptive factor in payments and for financial institutions, said Richard Crone, a principal with Crone Consulting LLC.
“Ultimately, 5G technology will be the death knell for physical point of sale technology that was designed more than 50 years ago,” Crone said.
The heavier bandwidth of 5G will also enable banks to more directly manage features and apps that previously relied on hardware and networks, and as more operations move to lightweight clients, it will improve banks’ capabilities and lower costs, Crone predicted.
“Banks right now are limited by the data density capacity and the reduced latency of existing wireless systems, but with 5G you have a highly reliable network that allows transactions to be authenticated and processed in real time through the cloud, which will have big implications on existing systems, ”Crone said.
Many applications 5G will usher in are still not within immediate reach, he cautioned.
“We’re still five or 10 years away from the point where 5G will be fully built out to reach all users with the same degree of reliability,” he said.
appId : ‘1203048096448894’,