With launch of cloud point of sale, Mastercard powers an ecosystem to take on Square
- Mastercard deployed the first live pilot of its cloud point-of-sale technology.
- The cloud program enhances the global payments ecosystem built by Mastercard’s Tap on Phone solution which could give Square’s POS technology a run for its money.
Mastercard recently kickstarted the first live launch of its cloud point-of-sale offering, the Cloud Tap on Phone pilot program. With its cloud point-of-sale technology, Mastercard gives open access to solution providers and fintechs for the development of their own cloud based POS products.
The offering opens the door for a partner ecosystem that could potentially rival the point-of-sale products of payments innovator, Square. More than 2 million businesses worldwide use Square’s POS and it has supported around 340 million customer cards for transaction use.
The cloud technology is hosted on Microsoft’s Azure cloud platform and builds on Mastercard’s earlier Tap on Phone solution which allows businesses to accept contactless payments through an Android phone or tablet and cancels out the need of a physical card reader.
“Cloud Tap on Phone makes it easier for partners to develop their own cloud based solutions and distribute Tap on Phone to businesses with the development and certification of a software development kit,” said Nili Klenoff, Mastercard’s senior vice president of global acceptance solutions.
“Cloud POS solution is scalable, and a single instance of cloud POS can be used to distribute and maintain the Tap on Phone solution across multiple devices. Now with the cloud technology, maintenance can be handled remotely versus in-store.”
Mastercard’s Cloud on Tap ecosystem will enable businesses of any size to accept smartphone rendered contactless payments. This bodes particularly well for small businesses struggling with investment into costly POS technologies.
As a trusted household name, Mastercard also holds a distinct competitive advantage that will be extended to its partner ecosystem. The card network’s POS venture will prove instrumental to it owning a greater chunk of SMB transactions.
Cloud Tap on Phone is a product of Mastercard's partnerships with payments gateway NMI and payments technology firm, Global Payments.
Mastercard launched the cloud solution with IT services provider Computer Engineering Group as the first company to pilot the program.
The point-of sale-program is reflective of Mastercard’s interest in expanding its acceptance of contactless payments globally. Currently, Mastercard’s Tap on Phone solution is available in 16 markets across Europe, Asia Pacific, Latin America, North America and Middle East and Africa. Pilots are taking place with partners in various other countries.
The coronavirus pandemic has thrust contactless payments into the public eye with merchants and consumers being increasingly drawn into the fold of contactless because of fear of contracting the virus through the handling of physical payments and cash.
“Cloud Tap on Phone is an important innovation that will expand contactless card volume because merchant innovations like this and consumer contactless card usage have a unique relationship where growth in one accelerates growth in the other,” said David Shipper, senior research analyst at Aite Group.
Contactless payments and contactless merchant acceptance have a mutually reinforcing relationship. Innovations in contactless equal greater merchant acceptance which ultimately boils down to consumer preference of the safety and convenience contactless offers. By the same token, increased acceptance translates into a greater number of contactless payments.
In the third quarter of 2020, contactless payments represented 41 percent of in-person purchases globally, as compared to 30 percent in the previous year, according to Mastercard.
“Mastercard research finds that 74 percent of consumers indicated they would continue to use contactless technology post pandemic, which indicates the staying power of contactless and how the digital shift is here to stay for the long term,” said Klenoff.
Mastercard’s cloud POS technology and its Cloud Tap on Phone product has been developed by the company’s product development innovation team, Mastercard Labs. The offering is part of the payment technology company’s strategy for reaching a wider customer base through its cloud services.