MasterCard works with Apple to integrate Apple Pay

15185523191_8ca687eaf4_oOwners of the new iPhone 6, iPhone 6 Plus and Apple Watch will be able to use their MasterCard credit or debit cards from participating banks directly through Apple Pay.

At a store, consumers can pay by just holding their iPhone near a contactless reader with their finger on Touch ID and their transaction will be authenticated. For purchases within an app, consumers will simply touch to pay and authenticate with their fingerprint or passcode for a seamless experience without having to enter their card number or leave the app.

“Apple has a long tradition of introducing breakthrough products with features that really matter to people. Apple Pay, combined with MasterCard’s payments technology, gives consumers an easy, secure and private way to shop,” said Ed McLaughlin, chief emerging payments officer, MasterCard.  “We have been a pioneer of mobile commerce innovation for years – including the world’s first contactless and mobile payment solutions. We’re thrilled that MasterCard cardholders will soon be able to make payments from their iPhone 6, iPhone 6 Plus and Apple Watch, knowing that every purchase is secure and offers all the same guarantees and benefits they’ve come to expect from using their MasterCard.”

Apple Pay will be made available for U.S. consumers via a free update to iOS 8 this October. MasterCard cardholders will be able to make simple and secure payments in the apps of top merchants, as well as contactless payments at some of the most frequented U.S. locations including major stores, restaurants, transit providers, fuel and convenience stores, and all Apple Store locations. One of the first to accept Apple Pay via iPhone 6, iPhone 6 Plus and Apple Watch will be MasterCard’s long-time partner Major League Baseball.

Payments via Apple Pay integrate with the MasterCard Digital Enablement Service (MDES). Announced last year, this service, provided by MasterCard to banks, allows a connected device to be used for everyday shopping and payments. In addition to the banks announced today by Apple, MasterCard is working with its partners to bring additional banks on board quickly through the MasterCard Digital Enablement Service.

Here’s a quick note from MasterCard on their MasterCard Digital Enablement Service (MDES);

“New solutions like Apple Pay embody the digital transformation taking place around the world and reinforce our commitment to delivering secure, digital payments. Together, with our partners, we’re moving important products and solutions like EMV and mobile payments out of neutral and driving them forward at full speed.

Given this changing landscape, over the past two years, we’ve focused on developing a secure platform to enable consumers to use their cards when, where and how they want. We’ve come up with a solution that supports the new digital ecosystem we live in today, called the MasterCard Digital Enablement Service – also known as “MDES”.

Here are five things you need to know about MDES and the technology we’ve pioneered to enable secure transactions”.

  1. What is MDES? MDES helps transform any connected device into a commerce device to make and receive payments. The MDES platform is helping power the new iPhone 6, iPhone 6 Plus and Apple Watch to enable secure payments to take place for contactless and in-app payments.
  2. How it works: All MasterCard transactions made through Apple Pay are ready to use industry-standard EMV-level security, and are protected using standards-based payment tokens.  Tokens are card numbers that mobile devices use in place of the card number printed on the plastic.  MDES validates the transaction, maps from the token back to the PAN and forwards it to the issuer for authorization.
  3. Why do we use tokens? Using tokens enable us to deliver a more secure and a better payment experience.  The extra layer of security comes from the fact that we can lock a token to a specific device or channel.  If the token is somehow compromised and a fraudster tries to use it  MDES will block the transaction.  The better customer experience comes from the fact that in the event a device is lost or a plastic card is compromised – we can break the link in MDES between the tokens and the card – and reissue the token or the card – without disrupting the consumer.  It’s truly powerful when you can use advanced technology to deliver more security and remove consumer pain points.
  4. What kind of transactions does MDES support? MDES supports contactless payments and Digital Secure Remote Payments (DSRP).  DSRP is a transaction method where a consumer is able to make in-app purchases using a token. Contactless payments leverage NFC technology for point-of-sale transactions, while DSRP delivers EMV-like transaction for in-app payments.
  5. What’s next for MDES? MDES makes it easy for our issuing partners to enable their MasterCard accounts on devices that consumers want to use to pay on the go.  While MDES launched in the U.S. in 2014, it will expand more broadly to other major markets during the course of 2015, and will be extended to support MasterCard Cloud Based Payments which we announced earlier this year.

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Categories: Apple Pay, Mobile Payments

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