Basking in the spotlight generated by the introduction of mobile payment system  Apple Pay, both MasterCard and Visa International are in the process of defining a new category of transaction called “Cardholder Present.” The move is designed to encourage merchants to be more accepting of mobile phone-based payment authorization because payment processors and card issuers will take a smaller percentage of the gross purchase amount. Customarily, card issuers take 1.5% of each purchase amount when a customer presents, swipes or dips a physical card. That is called the “Card Present” rate. A much higher percentage – starting at 2.75% – is taken when a when a customer makes a purchase through a Web site or over the telephone and a “Card Not Present” rate is applied.

“Cardholder Present” rates have not yet been disclosed by the major card issuers. Neither Visa International nor MasterCard has confirmed their existence, but this post by Ian Kar on the Bank Innovation Web site makes it clear that Mobile Wallet service providers are evaluating this rate as an option. Introduction will be a vote of confidence in emerging methods for strong authentication of mobile users, including voice biometrics. Mobile Wallet service providers, like Apple, have made the case that banks, merchants and payment processors can have high confidence that an individual who is authenticated through his or her mobile phone is, indeed, who he or she claims to be.

Categories: Intelligent Authentication

Tags: Voice biometrics, Apple, mobile payments, Credit card, Visa International, MasterCard