The Cashless Cow: Mastercard’s Mission To Redefine Commerce

“The real power is in the network, the power to connect two and a half billion cards.”

Endless aisles of virtual food to scroll through on your fridge’s digital screen; a smart gas pump that registers a loyalty card before you get out of your car; sitting down at a restaurant and preloading payment so you can leave as soon as you finish eating.

These are ways Mastercard is shaping the future of how consumers and merchants view commerce. A “cashless world” is a term thrown around a lot with this massive credit network—carrying around a physical credit card, or cash (god forbid), has safety issues and can be plain cumbersome. Consumers carry their phones and digital devices everywhere. Mastercard realizes this and is continually trying to push the boundaries of how their clients think about spending money.

The Lowdown

There are almost 2.4 billion active Mastercards in use, with over 40 million merchants around the world. The company works with individual card holders, massive banks, world-famous brands and leading cyber-security companies.

“We always have to think about everything we do as ‘how we move the ecosystem of payments forward,’” says James Anderson, the executive vice president of global digital payment Products. “We have a two-sided market and we’re always trying to make it bigger and more successful.”

The way to push cash into the future was to make sure everyone with a Mastercard and a smart device could connect them together. That way, clients reap the benefits a digitized world and have access to a massive, trustworthy system that focuses on choice, integrity, security, transparency and privacy.

“Our concern was that we have this powerful network that was being delivered through a card, but it was just a delivery vehicle. The real power is in the network, the power to connect two and a half billion cards,” says Anderson “We needed to be sure that network could extend into the smart device arena and move forward to the future.”

Experts predict that by 2023, half of the world’s retail will be digital commerce. This trend is nothing new though, as companies like Amazon have cornered e-commerce for years and leading device companies like Apple have introduced new spending methods like Apple Pay. The problem lies in achieving a consolidated payment flow where users don’t have to download four apps, use passwords for two of them, biometrics for one and sing a song for the other.

Enter the new way Mastercard is trying to redefine the commerce space. Mastercard Developers allows companies to grow the methods clients can connect with one another. Developers is a set of APIs offered to the community to facilitate interaction with Mastercard over different new technologies. There are over 60 APIs available now, including fraud scores for merchants, Mastercard’s card agnostic digital wallet Masterpass, location tools to better understand spending habits in a given area (contactless and traditional) and more.

“People are looking for more value than just making a payment,” says Anderson. “Surrounding the payment is important, and we see how we can add value to things happening before and after you pay and that’s through APIs.”

It all connects through four stacks. The Mastercard network authorizes, clears and settles payments, which then connects to the digital infrastructure including tokenization and digitization. Then it comes to consumers through a wallet interface, like Apple Pay or Masterpass. Finally, merchant technologies complete the stacks by accepting contactless, online or physical payment. This allows Mastercard to roll out new systems as everything is digital—no more payment terminals to be shipped or regulated, just update or download an API and step into the future.

Driving revenue with new commerce

Conversational commerce, augmented/virtual reality and connected homes are ways Mastercard is looking to replicate the physical in-store experience entirely through a digital channel; enter IoT.

“Everything starts with the user. We want to build with the customer in mind,” says Stephane Wyper, senior vice president of new commerce partnerships. “Device is the next layer, we want to be device agnostic and exist within whichever device individuals use. Then it’s verticals, this is where we execute, what we’re doing and who we’re working with.”

Mastercard is deliberate in saying that they cannot solve everything themselves. As evident in the APIs, the company wants to partner and bring their expertise to existing organizations. This helps Mastercard keep an eye on what the emerging technology trends are and stay in line with IoT.

Retailers value these partnerships and are running wild with spending possibilities. Connected Mastercard vehicles are expected to be announced later this year, and chatbots can now help you order from Subway, cracking jokes and peddling mustard along the way.

“There’s no longer a separation between digital and physical. There’s blended experiences, that’s what consumers expect,” says Wyper. “It should be seamless and connected and retailers should work with you regardless of which device or channel I’m interacting with.”

Payment methods all revolve around convenience—consumers do not want to pay cash or stay in a traditional lane. Mastercard is trying to update tradition, and they’re succeeding. Regardless of scope and reach, from Intel to OakLabs, consumers to enterprise, it’s now in the best interest of companies to bring convenient digital commerce to their brand.

“Some companies say ‘I want to learn,’ that’s it. Others think about using startups to solve for pain points,” says Wyper “Lots are still learning, but more are now ready to deploy.”

Organizations implementing new spending strategies look for success in engagement, downloads, revenue and other commercial KPIs. Companies will look past the experimentation of IoT and base decisions off profit and loss, seeing the tangible value in using new commerce technology. Still though, you occasionally have to take chances in new commerce and apply the Field of Dreams treatment. “Build it and they will come.”

“If you ask 10 people what they want, you get 10 answers. The best way is to show them an experience and evolve from that,” says Wyper. “The approach is to do initial deployments then evolve from there. A great example is the chatbots, the second or third versions of it will show value and have consumers input from what they want.”

Commerce and marketing has evolved more in the past five years than the 50 years before it combined. Ways to spend and stay connected will increase as partnerships are forged and merchants gain access to exciting new technologies.

One thing is for sure: interest is high on these new credit card and commerce technologies.