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“We think cash, cards and mobile payments will coexist for many years…”

A big theme of Money 20/20 Europe in Copenhagen this year was an engagement between startups and established players. The Fintech Times spoke to Mastercard’s Amy Neale about startups collaborations and about the future of payments

What are your thoughts on how Money 20/20 Europe was this year?

Amy Neale:I think a big theme of Money 20/20 Europe has been an engagement between startups and established players. I think the narrative has really shifted over the last 12 months where startups perhaps were not so openly working with incumbent companies. And equally the other way round, certainly on the banking side there may have been a little bit of fear around what startups could provide them with. Definitely I can see in the last 12 months that narrative has completely changed. There is massive openness for working together. I think we are going to see huge amounts of collaboration – 2017 is definitely the year for execution.

At Money 20/20 Europe Mastercard announced the latest wave of startups to join Mastercard Start Path. What is the role of this initiative in Mastercard’s strategy?

A.N.: Mastercard Start Path is a global effort to support innovative startups developing the next generation of commerce solutions today. Start Path was launched in 2014 with an objective to help startups to grow their businesses faster than they could by themselves. Startups that join the programme can benefit from the knowledge of a global network of Mastercard experts, access to Mastercard customers and partners, and the ability to innovate on top of Mastercard solutions. Mastercard customers that join the program as partners get connected to the best and brightest startups and gain access to innovations from across the globe.

Is it right to say, that Start Path is a kind of Research and Development initiative?

A.N.: Start Path is a part of Mastercard Labs which is an R and D and innovation arm of Mastercard globally. Over the past four years we have worked with about 150 startups. Start Path is a 6-month programme for slightly later-stage startups.. The companies we have worked with have all taken on seed investment or Series A investment. They already have a product in market and are looking to scale up to the next level… So we work with those companies, we bring them in, they can be from anywhere in the world – our programme is completely virtual. We source them from right across the globe and are now calling for applications.

What are the startups you have worked with focused on? Is their main focus on payment services?

A.N.: It’s actually much broader than payments. We try to think in terms of “before, during and after” the payment. Areas that are interesting to us are fintech broadly, but I would characterise that as retail banking fintech. So anything that is innovating the way consumers engage with their bank.

Startups we work with are focused on bridging the gap between physical and digital retail through a variety of products and services. Several of those selected within the Start Path programme are harnessing insights from in-store traffic patterns and spending habits to create personalised experiences for customers. Others are helping retailers to accept payments through SMS and bill-paying tools for large expenses that historically could not be paid using a card. We have also a number of companies that I would characterise as being in the financial inclusion space. New technologies that are bringing more people into the financial system and giving them access to financial services.

How do you work with applicants – from finding to selecting them?

A.N.: We put out a call for applications but we also work with a network of accelerator programmes and venture capitalists right across the globe. We also do some desk research to find companies. We have large numbers of applications and filter them. This week we have announced six new companies that have been selected for the next 6-month programme. The latest wave of Start Path participants includes:

  •  CardUp manages monthly credit card payments for big ticket items such as rent or insurance, while also accessing credit and earning additional rewards. u ftcash enables micro-merchants and entrepreneurs to take collateralfree business loans and accept mobile app and messaging-based payments from their customers.
  • The ModoPayments platform enables new ways to pay, including the use of loyalty points to buy everyday goods in-store.
  • Movvo provides insights on in-store browsing and shopping patterns.
  • ToneTag enables contactless payments on any device using soundwaves instead of NFC.
  • RecommenderX develops cutting-edge data analytics to offer personalised recommendations for enterprise users.

What added value do you deliver to startups who are selected?

A.N.: There are three key areas which startups who are selected fall into. One thing that is really important for us is that we are always adding value to the startups we work with. This is not just sourcing new vendors. We actually want to build relationships with these companies in their journey. So we dive deep with them on what challenges they are facing in terms of scale in order to open doors to Mastercard. Subject matter experts that reside within our organisation educate them on different spaces that might help them craft better business propositions.

The second key part of what we do is that we actually work with them collaboratively on projects. We introduce all of the startups that are here today to different business units right across Mastercard to look for opportunities to co-create commercial deals.

And the third thing that we are doing with those startups is we are engaging them with our customer base. So Mastercard obviously has a vast network right across the globe. We are bringing startups into our network, making introductions for them and helping them to determine what the right channels to market effectively are.

Could you share any success stories your programme has resulted in?

A.N.:  We have had tonnes of projects that have come through the programme. Just last week we launched a project in Nigeria with a startup that came through the programme. It is a Nigerian team providing merchants with an alternative to cash on delivery in the eCommerce environment. There is another company called Kasisto which is based out in the US, which has a natural language processing technology that they have used to build virtual assistance. We worked with them to pilot that technology, enabling a natural language interface so that consumers can speak to their bank using messenger services.

You are talking about virtual assistance like Alexa?

A.N.: Correct. It is called KAI. We have a pilot project with that company. So there have been a good few tangible projects we have worked on and I think what we also are starting to see increasingly is that through our facilitation some of those startups are also going to work with our customers on really interesting projects as well. As an example, the above mentioned Kai is already working with banks and is well established in the market. And the last key piece of the puzzle for us is we don’t take equity in the startups when they come through the programme. In some cases when the programme is completed and we see a really good strategic fit with a startup then we’d also look to potentially invest as well.

Do you have any cooperation with blockchain-based startups?

A.N.: From a blockchain point of view we have worked with the UK based company Everledger who are using blockchain for the tracking for authentication of high value objects.

How do you evaluate the obtained results of your collaboration with startups?

A.N.: I think we have already seen some new products that have emerged out of that collaboration with startups. That’s really fantastic from my point of view. It is a very interesting way for our organisation to look left and right and see what the latest trends are. And what is also interesting for us being a global player – to provide insights for our customers with regards to what is happening in the startup space.

Your expectation on how the payments will transform within the nearfuture?

A.N.: We still think cards will be around for a very long time. We think cash, cards and mobile payments will coexist for many years, but over the next few years we’ll see more and more payments being made on mobile. We’ll also see adoption of new payments technology, such as paying through banking apps or via ChatBots We also see the use of biometrics growing when it comes to authenticating payments.

Kate Goldfinch, editor of The Fintech Times,

from Money 2020|Copenhagen 

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