Please ensure Javascript is enabled for purposes of website accessibility

MasterCard, Inc. Acquires Mobile Transaction Technology Provider as It Rolls Out New Technology

By Patrick Morris – Feb 24, 2014 at 11:54AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

MasterCard has acquired mobile payments technology service C-SAM as it brings the extension of its MasterPass technology to in-app payments.

MasterCard (MA -1.91%) announced two moves today at the Mobile World Congress in Barcelona, Spain, that further expand its presence in the mobile payment industry. MasterCard announced it has acquired C-SAM, a provider of software and services for mobile payment services. It also revealed the rollout of its MasterPass In-App payments technology, which is used for purchases across different providers through a single mobile application.

"Consumers today are living digital lifestyles, shopping in new ways using a range of new products and devices. Bringing C-SAM's mobile expertise into MasterCard will help us launch a wider range of mobile and virtual solutions better and faster -- bringing convenience and choice to consumers, while adding value to our expanding partnerships with telcos, governments and merchants," said MasterCard Chief Emerging Payments Officer Ed McLaughlin in a statement.

C-SAM has been used for commercial mobile payment functionality and services in six countries, and helps retailers and companies make secure payments while also providing loyalty programs and customer-specific offers.

MasterCard began a partnership with C-SAM in December 2012, and it also had a minority investment in the emerging technology company. It noted the acquisition of C-SAM will allow it to "speed the development and deployment of mobile wallets and payment solutions globally, including the rollout of its MasterPass digital service."

The terms of the agreement with C-SAM were not disclosed, but MasterCard did note that following regulatory approval, it expects the acquisition to be completed in the first quarter of this year.

"The acquisition of C-SAM is a significant milestone in our company's history," added C-SAM CEO Felix Marx. "While we have enjoyed a strong, long-standing relationship with MasterCard, the team is excited to be formally joining such an innovative and industry-leading organization to deliver end-to-end device-based solutions for service providers around the globe."

With the acquisition of C-SAM, MasterCard will also be releasing MasterPass in the second quarter of this year. MasterPass will be an app used to allow customers to have a single digital access point that will allow them to make payments at merchants. The company notes the technology is an "optimized checkout process" that "creates a seamless shopping experience, supported by the highest levels of security and cryptology."

MasterCard said ABI Research expects total mobile payments to reach more than $46 billion by 2016, five times more than the $8.5 billion seen in 2011. In addition, MasterCard highlighted it has already come to terms with Forbes Digital Commerce, MLB Advanced Media, Starbucks Australia, and others to allow for MasterPass to power in-app purchases.

"We're creating great experiences for consumers across all channels and all devices, and enabling merchants to reach new consumers in ways not possible in the pre-digital world," McLaughlin concluded. "We're also developing a framework to make all payments using MasterPass as or more secure than anything we can do on cards today, ensuring that consumers can benefit from the highest possible levels of security."

link

Patrick Morris owns shares of Starbucks. The Motley Fool recommends MasterCard and Starbucks. The Motley Fool owns shares of MasterCard and Starbucks. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Mastercard Stock Quote
Mastercard
MA
$344.59 (-1.91%) $-6.70
Starbucks Stock Quote
Starbucks
SBUX
$98.66 (-0.90%) $0.90

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
356%
 
S&P 500 Returns
118%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.