MasterCard forces merchant POS upgrade to contactless as standard

MasterCard forces merchant POS upgrade to contactless as standard

MasterCard has set a six-year timescale for all European merchants to replace their existing point-of-sale terminals with contactless-enabled tills by 2020.

The card scheme has set in motion a two-phase shift to contactless as a standard by insisting that all new POS terminals must be capable of accepting 'tap and pay' cards upon deployment as from 1 January 2016. Existing POS terminals can be replaced at end of their natural lifecycle, but at the latest by 1 January 2020.

Chris Kangas, head of contactless payments Europe at MasterCard says: "In 2013 alone the number of MasterCard and Maestro contactless transactions across Europe tripled and the volume spent on those transactions increased four times. Contactless users tell us on social media that they love tapping and want to tap more. Today's announcement is a much needed stake in the ground, marking the next milestone for contactless."

He says the shift will help fast-track the move to mobile payments in Europe, pointing out that by 2018 two in three mobile phones are expected to be NFC-enabled.

Comments: (7)

Ludger William
Ludger William - Oney - Lille 12 September, 2014, 09:28Be the first to give this comment the thumbs up 0 likes

What is surprising in this article is the idea to "force merchant"...!

It's a bit like if Apple would force Iphone 4S customers to buy an Iphone 6 by 2020 !

I doubt merchant will accept such deal presented in such a way as turning an innovation into an obligation appears to be pretty agressive.

Wait and see...

A Finextra member
A Finextra member 12 September, 2014, 12:471 like 1 like

Ludger,

The use of word "forces" in the title is misleading - clearly written by someone who doesn't understand the current dynamic.

Given how quickly prices for NFC-ready POS terminals have fallen, their cost shouldn't be an issue for any merchant. The six year horizon confortably gives time to any retailer to accomodate at least one POS replacement cycle. MasterCard is just sending a clear message: "please ensure you take care of contactless during your next POS replacement".

Actually, they could have given just 2 or 3 years - that would have been "forcing".

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 12 September, 2014, 13:271 like 1 like

@LudgerW: Isn't it a common practice for tech companies to support only the current version and one prior version but none earlier than that? We keep hearing of announcements of withdrawal of support for Windows, Office, SAP, and so on. I'm not an Apple user but I'd be terribly surprised if Apple will provide any support for iPhone 6 - let alone 4S - in 2020. Why should MasterCard be the exception to this industrywide practice? 

Ludger William
Ludger William - Oney - Lille 12 September, 2014, 14:13Be the first to give this comment the thumbs up 0 likes

@Andrei : Thanks for your feedback regarding eventual current Mastercard dynamic. So, if the word “forces” has been used in a buzz target, then Finextra becomes more of a trendy than professional website...which I dought.

When an ICS gives an end-date to the market, I strongly believe they should reconsider their customer relationship policy. Therefore, although it appears like a soft recommandation it still isn’t Mastercard best communication and that’s my point.

@Ketharaman : Thanks for your comment. I have only one answer to both of your question : We are in a B2B business rather than B2C and other alternatives exist.

A Finextra member
A Finextra member 12 September, 2014, 14:21Be the first to give this comment the thumbs up 0 likes

Ludger,

I understand where you're coming from, but schemes have experience from the EMV migration - they know that simply asking doesn't get too far - they only way to introduce a new tech on a mass scale is to enforce it... a little bit... :)

Hitesh Thakkar
Hitesh Thakkar - FIS Payments Software and Services India - India 12 September, 2014, 15:02Be the first to give this comment the thumbs up 0 likes

Except misleding word 'Force'  in blog title nothing new about this announcement from card network company - MasterCard.

We have seen Triple DES compliance, EMV migration announcements which had been taken its actual course for each region.

I can connect dots of VISA 's HCE announcement, ISIS (now Softcard), MCX and many more announcements hinting on contact less - either in implementation stage or design stage apart from their own figures would have prompted to give indication towards Tap and Pay.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 12 September, 2014, 16:21Be the first to give this comment the thumbs up 0 likes

@LudgerW: TY for your reply. By citing the example of SAP, I thought I'd covered B2B. While I agree with you that other alternatives exist, (1) That's equally true of B2C (2) US retailers might not agree - the crux of their lawsuits against V/MC is that they don't have too many alternatives!

Trending Stories