Mastercard launches controversial ‘wave to pay’ programme

Mastercard is launching a controversial biometric payments programme in stores, as the card company tries to keep pace with nimble fintechs and bigger competitors such as Amazon.

Retailers that sign up to its pilot scheme can allow customers to pay in-store with a gesture such as a smile or a wave. The system, which requires customers to enrol first, could also be connected to loyalty programmes and purchase history.

“Payments is a wide space, and we are trying to offer what customers want,” Ajay Bhalla, Mastercard’s president of cyber and intelligence, told the Financial Times.

He said that Mastercard could act as the “enabler of the ecosystem”, setting unified privacy and security standards for a technology that has raised the hackles of privacy and data protection campaigners. “It’s important that we make sure that data is handled properly and the transaction is safe,” said Bhalla. “Everything is done with consumer consent.”

The facial recognition software itself will come from companies including Japan’s NEC, Brazil’s Payface and California-based PopID.

The first pilots are launching this week at five supermarkets run by the St Marche chain in Brazil. The ambition is to eventually allow consumers to use a single enrolment to pay across different stores, says Bhalla, with further pilots planned across regions including Asia, the Middle East and Europe.

Biometrics payment systems have been deployed by individual retailers for several years. US fast-food chain CaliBurger and PopID announced a system in 2017 that allowed customers to access loyalty rewards and previous order history by scanning their face. Both companies are part of the Cali Group holding company.

But large-scale adoption has not been forthcoming. Facial recognition technology and related systems, which exploded during the pandemic, have faced a litany of concerns from civil rights groups about both the storage of data and the ways in which it can be shared.

Amazon’s palm print reader Amazon One, which has been deployed in a number of its stores, faced scrutiny last August when US senators sent a letter raising questions over its data privacy practices.

Even in China, where companies such as Ant Group have pledged significant amounts of money to rollout checkouts with facial recognition technology, privacy concerns have stymied take-up.

Bhalla said that more than 70 per cent of customers said they had wanted to pay with the technology, and emphasised that Mastercard would make sure that data was handled properly.

“It’s important that we do it in the right way,” he added. “It’s all about creating trust.”

The programme is part of a wider effort by Mastercard to burnish its credentials as an innovator.

Bhalla said that the company was also examining using technologies such as augmented reality headsets for purchases.

It has ambitions to create identities in the “metaverse”, the still nascent cluster of virtual worlds using blockchain technologies.

Mastercard announced last February that it would start supporting certain cryptocurrencies, and started a partnership with Coinbase this January to allow users to buy non-fungible tokens without using cryptocurrencies.

Source: Financial Times