Mastercard moved $8 trillion on its cards in 2022 against a backdrop of rising interest rates to fight skyrocketing inflation. It is as if each one of the approximately 8 billion people in the world had spent US$ 1 thousand (about R$ 5 thousand) with the “plastics” stamped by the red and yellow circles of the brand. But, despite the card originating its name – and its main livelihood -, the American conglomerate is preparing to go beyond it.
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The plans range from the quick payment of the subway ticket in New York to the technology that suggests what the person wants to eat when they go to McDonald’s. Or it aims to take advantage of the potential of consumers financially included in Brazil through Pix and those that will come from its American version, FedNow – even though both heat up the dispute in the segment.
“Mastercard doesn’t just need to be where consumers are today. We need to be where they will be in the future, beyond the cards. And that’s exactly what we’re focused on,” summarized Mastercard’s President for North America, Linda Kirkpatrick, to reporters at “Innovation Day” at its technology hub in New York recently.
For this, the conglomerate has focused on an organic strategy and acquisitions. In recent years, it has invested more than US$ 5 billion in the purchase of companies and minority interests in different businesses.
Two years ago, in the same building, Mastercard announced its new strategy to go beyond cards. This is where the discussion about the future of payments takes place. Just like the Big Apple, there are six other company technology hubs in the world, two more in the US and the others in Canada, Ireland, India and Australia. In the New York unit alone, a thousand people work. Hubs are home to around 40% of a company’s global workforce.
Debit, credit, prepaid, contact or contactless, plastics remain Mastercard’s core business. But, in its ambition to go further, the group outlined a strategy based on three pillars: payments, services and new networks. In common, there is a focus on attacking new areas of business flow and strengthening the fraud prevention and data security aspects. The area called “value-added services and solutions” represents around 36% of its global revenues.
“Consumers are using products in different ways. Consumer preferences have shifted from things to experiences, conscious consumption trends are absolutely on the rise,” said Kirkpatrick. That’s why Mastercard has expanded the offer of products such as a calculator that helps consumers measure their CO22 emissions and how to offset them.
“Mastercard is creating more value in the payments and card solutions it offers customers through the aforementioned value-added services, becoming an important driver of price improvements,” wrote James Faucette, an analyst at Morgan Stanley, in a recent report.
Mentioned a few times on “Innovation Day”, Brazil is an important part of Mastercard’s strategy to move beyond the card into the future. The country is the company’s second largest market in the world, behind only the USA.
One of the domestic opportunities is in open banking, which has allowed consumers to share their financial data around the world. “Brazil is obviously a very large market,” said Jess Turner, Mastercard’s global executive vice president for open banking and API divisions. “It is a great example of innovation and the value they are wanting to create [NO BRASIL]through different regulations”, reinforced Amir Wain, CEO of i2c, a company focused on banking technology and digital payment.
Turner sees in improving the use of credit history an opportunity for the country in open banking. Adding value to information by having non-patterned data categorized for its best use by consumers is “very important,” he said.
Last month, the president of the Central Bank (BC), Roberto Campos Neto, was at Mastercard’s technology hub, in New York, where he met with the company’s global leadership, including the president for North America. Once closed, the meeting focused on trends in real-time payments supported by the Brazilian government. Pix was one of them. At the end of April, the tool hit the mark of 600 million active keys, according to BC.
Kirkpatrick admitted that competitor Pix is a “tremendous success” as it financially includes hitherto underserved consumers, but highlighted the importance of payment solutions that are secure and protect personal data. The issue is of concern in Brazil and has led the BC to establish new regulations. The most recent is the obligation, as of November, for banks and other financial institutions to share fraud data.
“There is an opportunity to increase the power of security and protection and innovation in this environment”, evaluated the president of Mastercard for North America. She also sees opportunities in new entrants. “Pix is another way to pay, to include consumers who are financially underserved in our ecosystem and who can, in the end, evolve into the use of other products and services.
The information is from the newspaper The State of S. Paulo.
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