Mastercard Tests P2P Payments In Europe

by Raymond Pucci 0

 Many small merchants still do not accept credit or debit card payments, so Mastercard is looking at an alternative for them. According to the following article, Mastercard is testing a P2P payment service in Europe that would enable a customer-to-merchant payment transaction.

Mastercard is exploring the idea of essentially enabling P2P mobile payments between customers and shop owners. It’s an effort aimed at addressing a longstanding issue for smaller merchants – the lack of resources to accept card payments.

Citing data from Worldpay and Expert Market, Mastercard points out in a statement that one in ten small and medium-sized businesses don’t accept such payments, and that one in four consumers in the UK avoid businesses that don’t take cards.

Mastercard’s solution aims to get around that problem with mobile technology: Merchants simply download a smartphone app allowing them to accept contactless payments, and then customers can pay with a digital wallet such as Masterpass by tapping their phones to the merchants’ devices. It’s an approach that echoes a groundbreaking initiative in India, where a system called Aadhaar Pay lets consumers make purchases by scanning their fingerprints on merchants’ smartphones.

Mastercard says it’s trialing the system with select businesses in the UK and Poland, and that it will use the opportunity to refine associated security standards be applied more broadly.

As P2P payments continue to grow more popular – and a new messaging feature in Apple’s next iOS upgrade should help things along starting this autumn – this approach could gain some serious traction in the rapidly transforming payments industry.


Many payments providers are trying to jump into this space now that Venmo has proven to be a killer service among millennials for PayPal. The competitive advantage will be to make P2P more seamless and faster than how Venmo currently works. Early Warning’s Zelle promises to deliver simplicity and speed and has just launched among major banks. Apple Pay announced its offer for this fall, although only for iPhone users. Meanwhile Venmo is said to be testing a debit card that could be used for merchant payments. Others will join in and the test for merchants will be the fees and value proposition. Stay tuned.

Overview by Raymond Pucci, Associate Director, Research Services Advisory Service at Mercator Advisory Group

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