What Is MasterCard PayPass?

PayPass is the MasterCard contactless (radio frequency) payments feature. PayPass allows cardholders to make MasterCard payment transactions without having to hand over or swipe their payment card. It is therefore ideal for those environments where speed and convenience are essential. A PayPass card looks similar to a standard MasterCard card, except for the PayPass identifier on the front and a shorter signature panel on the back. However, the inside of a PayPass card is very different from a standard MasterCard card. In addition to the magnetic stripe on the back, embedded inside the card is a contactless chip that stores and processes the payment account data and a connected antenna that typically runs around the card perimeter. The chip and antenna transmit the data through the air to a PayPass reader connected to a merchant’s point-of-sale (POS) system. PayPass is a new “contactless” card payment feature that provides consumers with a simpler way to pay. Using PayPass, consumers simply tap or wave their payment card on a specially equipped merchant terminal that then transmits payment details wirelessly, eliminating the need to swipe the card through the terminal. The new solution is ideal for traditional, cash-heavy environments where speed is essential, such as quick-serve restaurants, gas stations, and movie theaters.

How MasterCard PayPass Works

PayPass is an enhanced payment card that features an embedded computer chip and hidden antenna. Cardholders simply tap or wave their MasterCard PayPass card on a specially equipped merchant terminal. The card then securely transmits payment details wirelessly, eliminating the need for cardholders to hand over their card to the merchant. Account details are communicated directly to the special terminals and are then processed through the MasterCard highly trusted acceptance network. Moments after consumers tap the terminal with their PayPass card, they receive payment confirmation and are on their way. PayPass is built around globally interoperable standards and relies on the ISO Standard #14443 to transmit payment data via radio frequency.

Consumer Benefits of MasterCard PayPass

• “Tap and go” feature provides a quick, easy payment, improving the overall in-store experience
• No signature required at QPS merchants for purchases less than the QPS floor limit
• PayPass cards are accepted anywhere worldwide, where MasterCard is accepted
• Simpler and faster than cash, thereby improving the overall consumer experience
• Provides better record keeping than cash
• Cardholders remain in control of the card, increasing their feeling of security during transactions

Merchant Benefits

• Simpler and faster than cash, especially at drive-thrus, thereby improving the overall retail experience
• Can increase average transaction amounts compared to cash payments
• Provides a reliable, trusted payment method that works well in “quick pay” environments
• Helps attract new customers and increases loyalty

Convenience is Everything.

Fast food. Remote control. ATMs. Online shopping.

What lies at the heart of every one of these revolutionary trends? Convenience. Specifically, saving people time and giving them greater flexibility. Now, you might think that swiping a payment card is as convenient as it gets. That is, until you’ve tried MasterCard PayPass.

It never leaves your hand.

A nice, secure feeling, to be sure. But there’s something more. One tap and you’ve got it. Instantly. Effortlessly. Even for little things like newspapers, movie tickets, or tolls. No wonder 63% of respondents recently said they would likely use MasterCard PayPass if it were offered by their issuer.*

In short, PayPass enhances the consumer experience by adding greater convenience and payment choice. So it helps merchants and issuers attract new customers. While strengthening existing relationships. And if it replaces small cash transactions the way research says it will, commerce may never be the same.

This little bit of extra convenience is big. Very big.

Keep 'em Moving.

In quick-serve environments, every second counts.

Especially fast-food restaurants, drive-thrus, convenience stores, movie theaters, self-serve gas stations, mass transit, pharmacies, parking garages, and toll roads. And nothing feeds the need for speed better than MasterCard PayPass. In fact, in a recent market trial study of 16,000 cardholders, MasterCard PayPass consistently shaved 12–18 seconds off drive-thru transactions as compared to cash. It saved even more time compared to traditional credit transactions. These numbers shouldn’t surprise you.

With MasterCard PayPass, one tap is all it takes.

And for many quick-pay transactions under $25, no signature is required in the U.S. and Canada. Of course, quicker transactions mean shorter lines. And shorter lines attract more on-the-run customers, particularly during peak periods. Speedy service is also key to a positive consumer experience. And faster throughput frees up store staff to focus on other things—like better customer service.

What’s more, PayPass means fewer cards will be left behind because they never leave the customers’ hands. And because there are no moving parts or openings exposed to the elements, readers are easier to maintain.

Looks like a win-win for everyone.

Cash Meets Its Match.

Small-value transactions have long been the last stronghold of cash. But all that is about to change.Enter MasterCard PayPass. Studies prove that in many point-of-sale environments, it’s faster than cash.

Incredibly, it’s even faster than exact change.

But that’s not all. Transactions tend to be at least ten percent higher when using a card instead of cash. PayPass will increase sales volumes at acceptance locations that have traditionally been cash-only.

More transactions. Bigger transactions. That’s quite a combination.

As for consumers, well, they can’t wait. In a recent U.S. survey, 86 percent report that they want to use cash less often. Most now carry less than $20 in their wallets. And they’re comfortable with using a card for very small purchases. Using less cash also means fewer trips to the ATM. And better record keeping. In many markets, consumers are also protected by zero liability for fraudulent transactions when using MasterCard PayPass. Little wonder that people who would definitely use PayPass say it will replace cash in more than half their future transactions.

The only question is, what are you waiting for?

Be Where They're Going.

Where are consumers headed today?

We know they’re driven by convenience. And they’re looking to save time. Here’s another big one: Choice.

With MasterCard PayPass, consumers are free to choose an option other than cash. They’re not even limited to using a card. Because the PayPass feature can also be built into a cell phone, key chain tag, key fob, PDA, or other device. Simply tap or wave it at a reader, and your purchase is complete. And it can be added to any type of payment account: credit, debit, prepaid, or stored value.

Of course, more choice leads to more usage. And more usage leads to more revenue for everyone.

One final thought.

Focus groups indicate that PayPass scores high in being “cool.” Really high. It may have something to do with not having to look for change. Or the control you get from the card or device never leaving your hand. Or that one-tap-and-it’s yours feeling. Whatever the reason, PayPass is just plain fun to use.

So, will it really be the next new, gotta-have-it item? Yes. Absolutely. Positively.