MasterCard, Visa deal may bring tap-to-pay back from the dead

Jason Del Rey
A customer pays at a register with a smartphone application.
Philippe Huguen | AFP | Getty Images

MasterCard and Visa announced on Wednesday a plan to endorse a new mobile payments technology that could bring the idea of using your phone to tap-to-pay for purchases back from the dead.

The technology is built into the latest version of the Android mobile operating system, called KitKat. At the time, the payments industry was abuzz about the inclusion of support for something called host card emulation, or HCE. Blackberry already supported HCE, but Android's market share dominance was the reason to now take notice.

HCE essentially allows the payment card info typically transferred when a card is swiped to be stored in the cloud. Historically, mobile carriers controlled who gained access to the secure element. That means they've ultimately been able to decide which apps a shopper can use for NFC payments in brick and mortar stores.

(Read more: Whether PIN or signature, smart cards are coming)

NFC, which stands for near field communication, is a wireless technology that allows a piece of hardware to exchange data with another piece of hardware nearby simply by bringing them close or tapping them together.

Wednesday's confirmation that MasterCard and Visa are certifying this new payments approach is a big deal.

The development means that a wide range of businesses — from banks to retail chains — can now build payment features into their Android mobile apps no matter what wireless carrier the phone is running on. This means the country's biggest banks, with their sizable app user base and consumer trust, could be the next big players in the competitive world of in-store mobile payments.

Click here to read the full report from Recode.

—By Jason Del Rey, Re/

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