Verizon and Mastercard have announced a new partnership that hopes to advance contactless payment solutions with 5G cellular service. The collaboration is aiming to help small and medium-sized businesses and one of the most interesting possibilities is making iPhone and other smartphones contactless payment terminals without needing any external hardware.
Square, Paypal, and others revolutionized credit card payment terminals over the last decade with small dongles that work via headphone jack, Lightning port, etc., and later evolving to allow for external chip and NFC readers. That made accepting payments easier for a whole range of businesses and probably enabled and inspired many new small businesses to start.
Reported by CNBC, now Mastercard and Verizon are teaming up to innovate around 5G and contactless payments. The plan so far is relatively vague with the goal to “have some innovations from the partnership by 2023” that will improve commerce for small and medium-sized businesses.
But one of the most interesting possibilities shared by CNBC’s Frank Holland is the goal to take payments via contactless NFC taps on devices like iPhone and Android smartphones. So far with iPhone, the NFC contactless tech only works to make payments, not receive them with credit and debit cards.
And they’re going to look at things like innovation, including tap and touch technologies for smartphones that allows these smartphones to be turned into tap and touch payment terminals.
But for something like this to come to iPhone/Apple Pay, Mastercard and Verizon would surely need to partner with Apple – something there’s no mention of for now. And it’s also possible Apple is already working on the functionality itself.
While Apple Cash works to send money to others via iMessage and can then be spent via Apple Pay/NFC in stores, online, and in apps, it’s not designed as payment system for businesses.
As for how 5G is relevant to the contactless payment innovation that Mastercard and Verizon are shooting for, it’s probably not that crucial other than 5G will become the defacto cellular network over the coming years. Mastercard’s CEO gave a generic example about 5G helping in a shopping scenario:
“A large retailer can easily do this. A small business, how are they going to do it? That’s exactly what this will bring; 5G allows us to deliver the full experience,” Mastercard CEO Michael Miebach first told CNBC, ahead of the announcement. “For example, I choose an item in a shop, but actually they don’t have the color I like. So I’m going to have it sent home, and it is going to be paid once it arrives, all of that is coming together and we with 5G will be enabling this.”
Miebach also spoke about new areas to grow into, possibly even alluding to cryptocurrency payments and the work being “long term”:
“There’s also more reach into new types of payments,” he added. “In the end, the way I look at it from our businesses, we’re building a long term market for us to grow into.”