Verizon and Mastercard announced Tuesday a partnership that focuses on 5G contactless payment for consumers and small- and medium-sized business.
They expect to have some new innovations by 2023.
The collaboration will allow businesses to use emerging payment technology to convert smartphones into cash registers, turn wearables like watches into payment devices, and facilitate touchless retail similar in style to Amazon Go stores.
This can be done easily by a large retailer. How will a small business do it? CNBC first heard Mastercard CEO Michael Miebach speak out about the 5G technology. “For example, I might choose an item in a shop but they don’t have the right color for me. So I’m going have it sent home and it will be paid once it arrives. All of this is happening and we with 5G are enabling it.
CNBC spoke with Hans Vestberg, CEO of Verizon. He stated that 5G will allow small and medium businesses to process transactions faster and to focus on what they’re delivering to customers. “5G will allow you to transact with your customers in a more frictionless way and help you focus on your business. This is what we see in touchless stores. However, coming out of Covid, I believe we see more touchless because it’s a part of our society today.
The Mastercard-Verizon partnership aims to further digitize, disrupt and digitalize global consumer spending at merchants and retailers. This is an estimate by the payments giant that it will be approximately $50 trillion annually. Mastercard and Verizon teams will work together at Mastercard’s New York City Technology Hub to develop additional applications for the 5G alliance.
Teams at Mastercard’s Tech Hub will explore the use of Internet of Things (IoT) and Mobile Edge Computing in retail. MEC allows cloud computing and other online capabilities within the limitations of an internet network.
“We’re bringing computing and data storage closer to you, the consumer. That means you can get a service faster, it’s more secure, and it’s easier to access it because it’s closer. Vestberg stated that some data must be very close to others, while others can be far away. Vestberg said that while this can be done in any industry, it is most useful in the financial sector, as transactions require high security.
Miebach believes that small- and medium-sized companies will be the largest growth areas for 5G contactless payment and that the increased computing power has the potential to help grow their businesses.
“As a small-business owner, you must compete in a more digital manner than ever before. Miebach said that brick and mortar might be your first experience. Let’s suppose you go to a restaurant and try curbside pickup. Now, you want to operate the business across both channels. This will not only make the experience better, but it will also result in more sales for the merchant. It will also increase the turnover of the issuing bank, which issues credit cards, as well as ours.
He added that there is also more reach for new types of payment. “In the end we’re building a long term market for ourselves to grow into, the way I see it from the point of view of our businesses.”