Goldstuck on Gadgets

Making money fit for the future

October 5th, 2016
There is a problem with money – it now comes in many forms, but is not fit for the future. That’s going to change, writes ARTHUR GOLDSTUCK.

Pepper is not your everyday waiter. He is a robot that can move on its own wheels, taking orders from customers in a restaurant, fetching the food and delivering it to tables. But he’s not just a novelty: over the past year, more than 14 000 units have been deployed in fast food outlets across Japan.


Its maker, Softbank, builds a thousand every month and sells out as fast it produces them. Pepper has branched out into dentist offices, bathhouses and even life insurance sales.

Pepper’s international breakthrough came in May, when Softbank teamed up with Mastercard to add payment functionality via the Masterpass digital wallet app. It allows customers to pair the app on their smartphones with Pepper, and make payment through a touching a button on their screens or tapping the phone on Pepper.

It is currently being rolled out out mainly by Pizza Hut in its outlets across Asia, but is not going to stick to fast food. Meiji Yasuda Life Insurance in Japan plans to put a hundred Peppers to work as salesrobots at its 80 branches.

Pepper may well look like the future of sales, but in truth is only one of many futures that is beginning to emerge. At the Mastercard Innovation Forum in Budapest last week, where Pepper made an appearance, it was clear that the real secret was not in the artificial intelligence that makes Pepper possible, but in the interfaces that make payments seamless.

According to Michael Miebach, chief product officer at Mastercard, the problem with money is that it no longer works seamlessly, even in the digital area of connected accounts and mobile money apps.


“The consumer today mainly engages with us through plastic, and some use digital payment factors,” said Miebach in an interview in Budapest. “So the payment experience can be digital, but there are many other experiences around payment that are not connected to each other.

“Take loyalty programmes with frequent flyer miles: to figure out what my mileage is, I have to go onto a website. And I can’t connect it with my card account. So there is a disconnect between all the payment tools. Many of them work well by themselves, but they are not fit for the future.”

This startling statement comes as research reveals it is not only so-called millennials who are ready for digital and connected payment systems. Consumers across the board want to be able to pay on any available channel, at any time, anywhere.

“They want convenience, it must be simple and smart, and it must be secure,” said Miebach. “The most important thing is safety and security, which is not only about preventing theft: it means that the payment must only take place when you want it to, and where you want it. Those needs are universal, for millennials and for older people.”

The initial focus is on what has been around for a long time, namely the existing form factor of the plastic card and how it will evolve, and linking it to what’s happening in the Internet space.

The big push in the United States at present is for the EMV system, named for card associations Europay, Mastercard and Visa. A chip embedded in the EMV card allows for authentication of the transaction on the card itself via a PIN number linked to the chip. South Africa introduced the system a few years ago, but it is only beginning to be a dominant safety standard in the USA.


It is likely to be followed by a shift to tokenisation, which allows a random string of digits, linked to a card number, to be used once-off for the transaction, so that the card details are not stored by the merchant, and cannot be reused if intercepted.

Then, according to Miebach, “We move all the way to consumer self-authentication, or biometrics, and here it gets really interesting. I believe biometrics will be a critical factor to identify who is paying and who they are paying.”

Many smartphone users are already familiar with biometrics thanks to fingerprint recognition on newer smartphones. However, Miebach believes that facial recognition has the potential to be as big.

At Mobile World Congress in Barcelona in February, Mastercard demonstrated the concept of Selfie Pay, based on many smartphones having a camera that can recognise facial features. Instead of typing in a password, the user selects the Selfie Pay option, takes a photo with the front camera of the phone, and the transaction is authenticated. It’s already in use in California and the Netherlands.

In principle, there is little difference between biometric authentication like fingerprint and facial recognition on the one hand, and voice and iris scans on the other. It all comes down to the platform where the payment is being made, and which is the most natural form of authentication at that moment.

However, even the selfie does not offer enough convenience, says Miebach, as one still has to hold up the phone and take pic.

Raghav Malik, Senior Analyst in Enterprise Security Solutions doing a product demonstration of Identity Check in MasterCard stand at the Mobile World Congress in Barcelona, Spain, Monday, Feb. 22, 2016. The company displayed the future of payments for devices and wearables. (Carlos Alonso/AP Images for MasterCard)

Raghav Malik, Senior Analyst in Enterprise Security Solutions doing a product demonstration of Identity Check in MasterCard stand at the Mobile World Congress in Barcelona, Spain, Monday, Feb. 22, 2016. The company displayed the future of payments for devices and wearables. (Carlos Alonso/AP Images for MasterCard)

“How about if you have continuous proof of life, such as heartbeat patterns and continual authentication, based on wearables? It will be very intuitive and consumers won’t even notice it’s happening.”

There is one fundamental reason consumers would embrace this payments future, and why organisations like Mastercard are working so hard to turn it into reality.

“It sure beats the world of today with the range of passwords and user names we need to remember,” says Miebach. “That’s like having to guess who you are every time you make a payment.”


  • Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Follow him on Twitter and Instagram on @art2gee

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