Mastercard Chases Technology That’s Functional, Not Just Cool

Mastercard may not be the first company that comes to mind when the word fintech is bandied about, but the global payments company is a huge innovator.

It’s forging fintech company partnerships, churning out digital payment features and launching new services to protect businesses and consumers, all the while making it easier to pay for things. Yet it doesn’t get much credit as the press fawns over the latest financial technology startup. But that doesn’t worry the global payments company. Mastercard is less concerned with being first with a shiny new toy and more focused on developing technology that is practical and scalable.

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“Cool is not enough,” Ajay Banga, President, and CEO of Mastercard was quoted as saying at a recent forum. ‘‘Functionally cool’ is what we’re looking for. That’s the future of innovation.” In an interview, Banga argued that if technology runs just for its own sake it produces products and services that while interesting, are commercially applicable. Technology should solve a problem or improve processes in order to be embraced by the masses.

The CEO of one of the largest credit card issuers in the world also dismisses cries from the leaders of financial companies that bemoan the wave of technology that is leaving them exposed to more risk. The way Banga sees it technology has and will change all the time. It’s up to the leaders of financial companies to prepare for and embrace it. If they fail to, it's their own doing not that of technology.

Banga pointed to artificial intelligence for one example. It’s been growing in financial services for years, although it's just now that AI is starting to worry industry players as more of it comes together. “They will say, ‘AI changed everything in one year!’,” said Banga. “Technology is not the issue. It’s your openness to embrace it and you’re ability to comprehend it.”

Banga has been at Mastercard since 2009 when he joined as president and COO. Before ascending to the top at Matercard he was the CEO of Citigroup Asia Pacific. Under Banga’s charge, Mastercard has been moving full steam ahead with its digital offerings churning out products and services via its own internal efforts and through partnerships.

It has also been active in acquiring fintech startups including its recent purchase of Vyze, which makes a point-of-sale platform for merchants. In March it acquired Ethoca, the payment security services startup and Transfast, a cross border payment provider focused on the business-to-business market. When reporting first-quarter earnings Banga said Wall Street should expect more acquisitions out of the payments company.

Mastercard currently has a pipeline of between 20 and 30 potential acquisition targets and is currently in the due diligence phase. “All of these are intertwined in the idea of building our new capabilities and new services,” Banga said on an earnings conference call when asked about its recent deals. Mastercard aims to be present “across all rails of payment, not just card, but also non-card rails.”