Payments major Mastercard has been providing data analytics and other services to its customers, giving the company insights into everything from cryptocurrencies to small business operations. In an interview, Raj Seshadri, president, data & services at Mastercard, explained how data and machine learning (ML) are helping businesses recover after the pandemic, and why the recent downturn in the crypto market is not a reflection of the potential of blockchain technology. Edited excerpts:
With new forms of digital payments, is card payment expected to take a backseat?
The card business has plenty of room to grow, both in terms of distributing more cards, spending on cards, loyalty programmes, and transactions that can be put on cards. But if we go beyond, we are also looking at blockchain, open banking, and new types of payments.
Do you expect a decline in contactless payments as economic activities resume and people return to work?
Two things happened in payment and it happened in India too. Contactless payments grew 15-fold in India in 18 months. What we are seeing is that as the economy is opening, the shift to digital is sticking. It is becoming omnichannel. In categories like grocery and food, the shift to digital is stickier as more people are shopping online than before the pandemic. In other categories such as department stores where people want to touch and feel, we are seeing an omnichannel approach, but digital is much higher.
How have data analytics helped make digital payments secure?
We have card and bank portfolio data, but we also have macroeconomic insights on location, tourism, and travel. We use these insights in marketing services to build targeting models to help customers figure out what their audience wants. We also use them in our cyber intelligence. We have deployed machine learning into our network. If you have a Mastercard transaction, we can detect fraud much faster. We have fraud, risk scores, and credit risk insights. All of these secure transactions.
Has the recent crypto bear market affected interest in the underlying blockchain technology?
We don’t pass crypto on our networks. But we have 60 programmes where we can help consumers with cryptos to convert into a fiat currency. If a consumer is thinking about crypto, we want to be there with them, but in the right way. We are working with customers who are thinking about the application of blockchain and cryptos. We are working with central banks on central bank digital currencies (CBDCs).
There are many fascinating applications of blockchain that have nothing to do with cryptos. NFT is another example of blockchain. We are in the early stages of blockchain technology. There is a lot of hype around it. What is important is to identify where the long-term value and utility lie.
How is India different from other markets?
Every market is unique, based on how the government in that country wants to develop the market. In India, the focus on made-in-India is wonderful to see. During the pandemic, when payments shifted to digital, our data services helped many businesses. We went beyond payments and did things that had nothing to do with payments.
We put up digital readiness diagnostics to help small businesses go digital, and worked with a grocery store chain in managing its supply chain. We are working with a number of airlines to figure out which routes to open first, which consumers to target with what kind of offers in a personalised manner. We also worked with tourism companies in the US, Europe, and India to provide tourist insights to help them maximise the value of attracting tourists to the market. If you go to McDonald’s and order from kiosks, it is our intelligence that is customising the menu for customers.