A Smartphone Payment App? For That There's MasterCard

mastercard-appPiqued by Visa's latest efforts at contactless payment goodness with an iPhone case, MasterCard really wants in on the same game. Only the card for "everything else" wants developers to actually write apps for it, leveraging proprietary tech.

MasterCard's announcement, made today, is less technologically advanced than Visa's system, but possibly more intriguing: Something akin to PayPal's trick last year, MasterCard is actually opening up its custom financial code to developers. With access to some of MasterCard's API hooks, this means developers will be able to craft apps for smartphones (or even Web-based systems accessible from almost any Net-connected device) that will give direct access to MasterCard's payment systems.

MasterCard has already been experimenting by itself, and has come up with the ATM Hunter iPhone app—which basically does what it says in its name, and other developers could've done something similar before, but they'd have had to pay MasterCard for the privilege. The new system is designed to entice developers in, to build secure MasterCard payment systems into their apps, for in-app purchases, or even in-ad purchases. But MasterCard hopes it'll catch on and that the best uses for it are ones the company itself hasn't even thought of yet.

That's pretty plastic thinking for an up-tight business like a credit card company, and it's probably true that app writers will come up with novel ways to use the payment APIs and the data feeds like consumer spending patterns that may be extremely useful for targeted ads. But by its very nature as a credit company, MasterCard's public openness is extremely stymied by its overriding need for security—there are probably many more useful systems that developers could use, but which may expose MasterCard's main code to too much hacker attention. 

For this reason it's hard to see MasterCard's software-only approach making much progress. But who knows? If they teamed up with a company like Apple, with its advanced hardware plans for new ways to pay for stuff over near-field comms, this project could go far. 

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