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MasterCard's Woo talks mobile strategy, future

The company's head of mobile strategy defines MasterCard's role in the industry.

October 26, 2011 by James Wester — Editor 1, Mobile Payments Today

When Mung-Ki Woo joined Purchase, N.Y.-based MasterCard in January 2011, as group executive for mobile, he brought with him extensive experience in the mobile payment arena. Formerly of France Telecom–Orange Group, Woo had been instrumental in the development of the "Orange Money" mobile payment program deployed in several African countries as well as the deployment of mobile contactless services in some European cities.  

But back in January, when this year was still being heralded as "The Year of Mobile Payments," Woo was seen as more than a good hire; he was also viewed as a sign that MasterCard was getting serious about mobile payments.

And it's been an eventful year in mobile payments for Mastercard since Woo signed on. The company has been actively involved in a number of high profile mobile payment programs around the world, with its most important effort likely being its partnership in the Google Wallet in the U.S.

Mobile Payments Today sat down with Woo recently to discuss what MasterCard has accomplished in mobile payments thus far and to talk about what the company sees as its next steps in the market.

Actions speak louder than words

Woo said MasterCard has been a very active participant in mobile payments, including joining in the Quick Tap program with Orange and BarclayCard in the UK, working with Garanti Bank to launch mobile payments in Turkey, and, of course, Google Wallet.

Launched in May 2011, Google Wallet saw MasterCard join with partners like Google, Citi, First Data and Sprint bring the first NFC-enabled mobile wallet to market. Google Wallet went live on NFC-enabled Samsung smartphones at the beginning of September.

Woo said MasterCard is more interested in actions than discussions as opposed to some of its competitors who have done a lot of talking.

"The way we've communicated is very different (from Visa)," Woo said. "Whilst Visa has been making policy statements, we've been taking action."

Visa announced an ambitious mobile strategy in May 2011, and agreed to be a part of several products including Google Wallet, but as of yet has not released its own product. An executive of the company said in September that Visa will be bringing a mobile wallet product to market in August or September of next year. 

Woo said that by taking action, MasterCard is working toward clarifying a market that is still facing some confusion.

At this point, Woo said, mobile payments means both online and proximity payments. But while the online portion represents only 10 percent of the market, Woo said the offline retail side is in need of a technology to pull it together. And Woo believes that technology is MasterCard's NFC technology, PayPass.

Woo believes the message for both MasterCard and Visa is that the future of proximity payments is contactless. 

"The world of proximity payments is with PayPass payments. Our vision is PayPass," he said.

Spurring mobile payment adoption

Woo acknowledged that fostering adoption of mobile payments at the point of sale is a challenge for MasterCard since it only has an indirect relationship with both consumers and merchants through issuers and acquirers. There are two ways in which MasterCard can encourage the adoption of mobile payments, however.

The first way, Woo explained, is to simply get products that work into the hands of customers and merchants. Without that, investment and interest will lag.

"People will hesitate to invest if the product baseline does not exist," Woo said, and added that it's up to MasterCard to help remove the uncertainty that consumers and merchants have about mobile payments.

The second thing MasterCard can do is provide direction to all of the players in a market that is still disjointed.

"[The market] is very fragmented," Woo said. "There are a lot of acquirers, merchants and consumers," and Woo said that MasterCard needs to provide direction to them in order to free investment dollars.

But MasterCard isn't alone in getting things moving in mobile payments, said Woo, and offered Google Wallet as a prime example of how the company can provide direction.

"MasterCard didn't put (the Google Wallet) together," Woo said, "but we had partners who were willing to make it work and we were happy to support it. We are a b-to-b company, We can do nothing without partners."

He said MasterCard is finding willing partners in markets all over the world. 

"We had willing partners [with Google Wallet] and that coalition is not unique," Woo said. "You are seeing in a number of countries people who want to move things forward. We're seeing more companies wanting to move forward."

Woo said the timeline for when he thinks the industry will really start to move forward is sooner rather than later.

"Next year, you'll see more commercial services, more devices on the market," he said.

The development of mobile payments

And what will the market look like as it develops? Woo admitted that he's not sure how the market will evolve over the long term, but he said that MasterCard's role will be to provide clarity and get consumers more informed.

"Do I know how it will all work out?. No, but I have faith that people will come up with new ways to use these services," he said. "We can't control everything. We can encourage."

Woo added that over the next few years, the value proposition to consumers using mobile payments will be much richer, providing consumers with a better payment services and experiences.

"The value proposition looks the same (as current payment methods), but it's subtly different, subtly richer."

Woo likened mobile payments to the market for ebooks several years ago.

"The more educated the person, the more skeptical they were (about ebooks)," Woo explained.

He said there were plenty of consumers who loved everything about books who resisted ebooks.

"There were doubters who said they would never get rid of books," Woo explained, "who then saw the value of the ebooks. Now Amazon sells more ebooks than real books."