Usually when people say something “isn’t what it used to be,” it’s not meant as a compliment — the implication is that whatever it is now is less than it was before.
But that implication to the side, the world we live in as 2021 is approaching its halfway mark is objectively not what it used to be — it is now more connected, more digitized, faster-moving and more global than it has ever been.
And in the face of an environment remaking itself, Mastercard has had to recreate itself as well, Mastercard’s Executive Vice President of New Payment Flows Ron Shultz told Karen Webster when he sat in to talk about the connected economy. The firm is no longer what it used to be, either, he said, and the goal is to become something more.
“We’ve evolved very much from a company focused on building safe and secure credit and debit networks and card products, to one that’s now a multi-rail business,” Shultz said. “We’re focused on bringing separate instances all together in one suite of solutions or one application.”
While there are a lot of ways to pay for things in the world we live in — cash, ACH, real-time payments, peer-to-peer (P2P), mobile wallets — he said the digital consumer is being poorly served as they try to manage multiple tasks separately with different credentials and passwords to access various mechanisms for payment.
The overall approach for Mastercard as it evolves alongside the connected economy is to bring all of those separate mechanisms together in one easily accessible application, built to work for the needs of the consumer as well as the business payment ecosystem. The idea is to bring all of these options together under a single trusted banner so that users don’t have to go to multiple places to make all the transactions happen.
That work will certainly be a collaborative effort, involving the innovative financial institutions (FIs) and FinTechs flooding into the market offering new and better digital front doors to the various parts of the connected economy, he said.
Comrades In Collaboration
Mastercard does not view those players as competitors or as a disruption risk to its network but as comrades-in-arms building the new digital ecosystem, Shultz said. In the emerging connected economy, trust is tantamount yet uncommon at many FIs.
Partnering with FinTechs gives mainline players like the card networks an opportunity to expose the market to different and better solutions in both consumer and business payments.
But many have wondered if all of this collaboration creates a risk to those mainstream players offering a direct connection to their large customer bases, and that they might use those connections to essentially make them obsolete.
While Shultz conceded that disruption and disintermediation are always a risk, real consumer trust is much harder to build (and much easier to lose) than most firms admit, and the benefits of these collaborations far outweigh the risks. It would be foolish to slow down their pace of connecting for fear of losing out.
“What those new entrants are doing is very interesting, and I suspect they’ll continue to rely on those trusted names and networks, especially when it relates to payments and financial services,” he said.
It is often through partnerships with other companies that Mastercard is able to improve experiences for consumers, billers, merchants and corporations, he said.
“So, we’re pleased to partner with them and bring our assets and capabilities to the table because that just enriches the overall experience or environment in payments.”
Winning isn’t always about competition, he said, and it’s becoming clear that the collaborative path that delivers the best service to consumers or businesses and alleviates the most friction will be the winner in an increasingly connected economy.
As Shultz pointed out, consumers don’t really care about payment platforms; they care about paying their bills and being able to complete secure transactions where and when they want.
Merchants care about getting paid on time and want to ensure that the data that flows along with the transaction allows them to eliminate outdated manual processes that slow them down.
Consumers are always going to care about trust, which means Mastercard will have a big part to play in helping to build the connected economy for quite some time, he said.
“One thing is for sure: One size doesn’t fit all, especially with the consumer,” Shultz said. “So, they’ll make payments and conduct commerce in lots of different ways for many years to come. And we’ll partner with all the relevant players and deliver on that need because there’s still a need for trust and security. And the expectation will always be there.”