MasterCard expands PayPass wallet service into a platform

MasterCard (s ma) is expanding its mobile payment service PayPass into a larger platform called PayPass Wallet Services that will enable PayPal-like online payments and will include APIs (application programming interfaces) for developers to integrate their payment apps and services with PayPass. The service takes MasterCard further into digital payments and pits it against credit card rivals Visa (s v) and American Express (s axp), who are also moving forward with their digital wallet offerings.

PayPass Wallet Services will include three components:

  • The PayPass Acceptance Network will allow merchants to handle electronic payments both online and contactless using near field communications.
  • PayPass Wallet gives consumers a way to pay for things using any number of credit, debit and pre-paid cards from Visa, American Express, Discover. Consumers will be able to easily check-out without having to enter in credit card and shipping information.
  • PayPass APIs will show developers and partners how to connect their digital wallet into the PayPass Acceptance Network. That will allow them to take advantage of MasterCard’s check-out, authentication and security services.

American Airlines and Barnes & Noble (s bks) are the first two companies which will use PayPass online as a payment option. American Airlines will also incorporate PayPass Wallet into its mobile app. The plan is to roll out PayPass Wallet Services in the third quarter, first in the U.S., Canada, UK and Australia before expanding to other countries.

Eventually, PayPass will offer a host of features for consumers such as quick balance checking before purchases, spending controls and alerts received in real time and personalized offers and loyalty programs.

This is another sign of how the credit card companies are looking beyond their traditional products and stepping up with their own digital payment services that are more open, mobile and cross channel. Visa is moving ahead with, which is starting as an online payment system but will move into in-store payments using NFC. American Express introduced Serve, a kind of PayPal (s ebay) competitor that enables online transactions, peer-to-peer payments and carrier billing through Payfone. While PayPal, Google and the carriers along with rising start-ups like Square are trying to redefine payments in a more mobile and social world, the credit card companies are making sure they don’t fall behind and lose their relationship with consumers. As we’ve said before, a lot of these financial institutions are still in the driver’s seat in mobile payments because they have a trusted relationship with consumers.