Thank you for the opportunity to take part in your study.
The subject matter at hand is very complex, and MasterCard recognizes that with the rapidly evolving nature of payments all stakeholders, including government, will have questions. We'd like to tackle those head on.
I'm going to focus the discussion today on a few areas that you've addressed in your study, but first let me start by giving you a little bit about MasterCard's role in the payment system. MasterCard is a technology company. Our technology and expertise powers 1.9 billion cards accepted at over 35 million locations around the world in 210 different countries. MasterCard runs a network that allows card transactions to take place. Individual banks get our cards into the hands of consumers. Those individual banks are the ones that manage the relationship with the customers. Our acquirers connect merchants to the network and enable them to take card payments.
Our goal is to offer all payment stakeholders—be they consumers, merchants, or banks—the widest array of technologically advanced products to meet their needs, which is a good place to begin the discussion about mobile payments, starting with an overview of where we stand with credit card payments in Canada today.
First and foremost I can assure you that the plastic cards in your wallet right now are not going away in our lifetime. That will remain a payment option for consumers and merchants for the foreseeable future. However, consumers want options and access to new payment technologies. The first evolution of this is the contactless payments, the tap-and-go features like MasterCard PayPass. These have offered tremendous benefits to consumers and merchants, particularly those in high-volume, low transaction value environments, by offering a fast checkout experience. Just think of the line at Tim Hortons and how fast it is when the person in front of you taps.
The next evolution will be the use of the same contactless technology, but incorporated into a mobile device. The MasterCard Mobile Payment Readiness Index ranks Canada second in the world in gauging the readiness of markets for mobile payments. For such payments, consumers will create a mobile wallet on their smartphone by downloading an app from a traditional app store, load their preferred cards into that device, and make purchases at the point of sale by tapping that same device I mentioned earlier.
For merchants there's no change from the regular contactless card purchase other than the form factor being the phone. Because they use the same basic technology, any merchant that accepts contactless cards will be able to accept mobile payments. Let me stress that the cost is the same. As for the state of mobile payments in Canada, there has been limited rollout to date, but you should begin to see the technology in market more frequently this year.
Let me now turn to the role of government. MasterCard believes the government has taken the right approach by creating an environment that allows companies such as MasterCard to offer innovative payment options in a competitive market. The protection that already exists for merchants and consumers, such as the code of conduct or the MasterCard zero-liability policy for unauthorized transactions, still applies to mobile payments, and that doesn't change when the form factor changes.