By Michael Froman, vice chairman at Mastercard
SIGNALS
Achieving a global, sustainable and inclusive economy is no small feat. It is work that requires the collective action, commitment and collaboration of the public, private and civil sectors.
Paxos thinks the financial world will be dominated by digital assets. Here's how
By Ben Fox Rubin
Demystifying the metaverse for brands
By Raja Rajamannar
Making sending money as simple as sending a message
By Hayden Harrison
As crypto comes of age, there are growing opportunities —and growing pains
By Sophie Hares
Mastercard brings its payments network to Web3 and NFTs
By Raj Dhamodharan
Give a gift they’ll love
When your data controller is Snoop Dogg
The metaverse will be a fast-evolving and complex area with a great many potential use cases. Such a powerful platform will create massive amounts of personal data—and raise significant ethical, privacy and security questions.
By Caroline Louveaux, chief privacy officer and Derek Ho, assistant general counsel for Privacy and Data Protection
How to instill trust in every transaction —and every interaction
We must work together to protect trust in every interaction, taking what we all have learned in managing individual risk and bringing those best practices to the cyber realm.
By Ajay Bhalla, president for Cyber & Intelligence at Mastercard
Getting people back on board with mass transit
As part of the larger effort to bring people back to downtowns, it has become increasingly important to support mayors and local leaders with the various obstacles related to reinvigorating mass transit ridership.
By Miguel Gamino, executive vice president for enterprise partnerships at Mastercard
The new world of payments is all about change (not that kind)
By Vicki Hyman
Taking the uncertainty out of big monthly payments
By DeAnn Zebelean
How to be the [digital] first choice
By Grazia Fedele and Lora Mateeva
How to plant trees the right way
By Will Anderson, World Resources Institute and Elise Harrigan, Conservation International
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The future of parametric insurance
Prior to 2020, when the term parametric insurance was used, it was often met with scepticism or perceived as a novelty. The profile of recent climate events and COVID has highlighted the need for more tools to mitigate risks.
By Ruth Polyblank, vice president for insurance at Mastercard
"We are growing our relationships to be your strategic partner that enables payments during your payment journey and connects you to a broad suite of Mastercard products and services.”
Makings of a super app
An embedded commerce experience
Commerce in the digiverse
Issue #5, June 2022
Signals
— Maria Parpou, executive vice president for Mastercard Payment Gateway Services
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We're speaking to Mastercard experts and business leaders across the Middle East and Africa and around the world who are working together to build a more inclusive and sustainable digital economy that works for everyone, everywhere.
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How AI detectives uncovered $239 million in healthcare fraud, waste and abuse
By Amyn Dhala
The future of neobanks after the findustrial revolution
By Silvio Piserchia
Rebuilding tourism through small businesses
By Sarah Glaswand
Opening up a world of borderless payments
By Stephen Grainger
Re-centralising trust with CBDCs
In response to global trends and local needs, many central banks are evaluating the benefits and challenges associated with offering a retail central bank digital currency (CBDC) for the general public to use in day-to-day payments.
By Martin Etheridge, senior vice president for product development, digital assets and blockchain
Tackling the chargeback surge
The past two years have been a watershed moment for e-commerce, but the rise in online purchases has triggered an unexcepted consequence: a surge in both transaction disputes and chargebacks.
By Jeremy Bornstein, senior vice president for product management at Ethoca, a Mastercard company
Welcome to the Mastercard podcast that shines a light on the future of work and the topics of now. Hosted by Latoya Bennett-Johnson, she’ll guide engaging discussions with Mastercard employees and thought-leaders.
Taking control of bill payments in the era of hybrid work
AGONY AUNT
I finally took the plunge and opened my own small business. It’s called ‘She sells’ and—yep, you guessed it—sells seashells on the seashore. I’m making money, but I’m spending a lot of money too: on subscriptions, supplies and travel expenses. When look through my accounts it feels like I’m investing a lot in the business community without getting anything back.
Get easy savings in our response
SUDOKU
I finally took the plunge and opened my own small business. It’s called ‘She sells’ and—yep, you guessed it—sells seashells on the seashore. I’m making money, but I’m spending a lot of money too: on subscriptions, supplies and travel expenses. When I look through my accounts it feels like I’m investing a lot in the business community without getting anything back.
Kudos to you for taking a risk, chasing your dream and putting it all on the line to create a business. But with a busy life and tight budgets to manage, you need to spend your time and money wisely. Small to medium-sized businesses spend an average of $2,032 on their cards every month—more than double the consumer average $954 monthly spend. So you’d think someone would have realized business owners deserve a reward for their loyalty. They did—you just need to know where to look. On the Mastercard Easy Savings website, you can find a list of merchants that offer cashback, offers and rewards on every dollar you spend—from hotels and restaurants to fuel. You can also get rewards on business services and digital tools to unlock your business potential and keep you moving forward. It’s totally free to access and easy to enrol. And that’s empowering every business.
Mastercard Easy Savings is a fast-growing loyalty program that helps merchants reach high-spending small and medium enterprises across the globe. For more information, please contact your Mastercard account representative.
In the inaugural episode of this Mastercard game show, Sandeep Malhotra, head of Products & Innovation in APAC, gets grilled in the hot seat.
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View previous issues
—Sally Sells Seashells
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previous issues
October 2021
May 2021
October 2020
June 2020
Skilling for a digital future
An innovative initiative in Indonesia is empowering 100,000 people with in-demand skills for the digital economy.
Mastercard Center for Inclusive Growth
Travel 2022: Trends and transitions toward recovery
Learn more
The desire to travel is strong, and consumer and commercial demand for air travel accelerated meaningfully in early 2022. Could this be the start of travel’s long-awaited recovery?
MASTERCARD ECONOMICS INSTITUTE
Amid mounting household financial pressures, here’s how companies can protect their customers
With so much uncertainty still on the horizon, now is the time for billers to harness the power of new technology solutions for the benefit of their customers.
By James Bushby, senior vice president for strategic sales of real-time payments at Mastercard
Wargaming: Stopping cybercrime by copying it
To the chagrin of cybercriminals worldwide, technology is simulating possible cyberattacks before the actual perpetrators even get a chance.
By Gamze Yurttutan, vice president for Data & Services at Mastercard
Cybersecurity: Is third-party risk management the missing link?
A research report by RiskRecon set out to better understand the third-party risk management challenges currently facing the most populated U.S. cities in order to raise awareness about the visible risks and vulnerabilities.
RiskRecon, a Mastercard company
Explainable AI: From black box to transparency
Give her credit: Expanding women's access to finance
By Payal Dalal, Luz Gomez and Avni Patel
Consumers are already connecting their data to manage their financial experiences, and they’re enthusiastically looking for what’s next.
The rise of open banking
Why shared principles and collective action are the building blocks of a sustainable, global economy
Collaborating on the future of immersive commerce
Over the next few years, tech innovations will integrate consumer journeys across physical, digital, and virtual environments, radically expanding omnichannel retailing and creating powerful new touchpoints for brands.
By Ken Moore, chief innovation officer at Mastercard
Combatting hacks, thefts and fraud in DeFi
By Dave Jevans
Compassionomics: Increasing financial wellness using price transparency
By Alyssa Romeo
Keng Sreymom, 36, lives with her aunt in one of the floating villages on Tonle Sap, the largest freshwater lake in southeast Asia. For centuries, thousands of Cambodian families have lived and worked here. The country depends on their work which yields 500,000 tons of fish in a typical year and provides more than two-thirds of the protein in Cambodian’s diet. The combined effects of deforestation, climate change, upstream hydropower dams and overfishing have dramatically reduced the region’s fish populations over the past few years and threaten the region and livelihood of its residents. Keng is part of a Tonle Sap reforestation initiative focused on regrowing Tonle Sap’s gallery forest by engaging the local community in planting and sustainable sourcing efforts. The effort, driven by Conservation International, aims to restore over 200,000 trees across 1,260 acres while sustainably supporting a crucial $2 billion fishing industry. The initiative contributes to an increasingly urgent global mission to combat climate change by curbing carbon emissions and restoring natural landscapes. The need is especially important in Cambodia, because of its vulnerability to climate change. Projects like this one can help ensure Tonle Sap remains a lifeline for the Cambodian people.
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Restoration and growth of an inclusive economy through collaboration Conservation International is one of two environmental nonprofits guiding landscape restoration strategy for Mastercard’s Priceless Planet Coalition, a consortium of more than 100 organizations combating climate change and global deforestation. The coalition’s goal is to restore 100 million trees by 2025 in at-risk areas worldwide, and earlier this week announced Tonle Sap would be among 15 new projects across six continents. Keng’s story highlights the intrinsic connection between people and the planet, reinforcing the notion that one cannot prosper without the other. It also reinforces the opportunity that with intentional action we can solve for increasing climate pressures like those on Tonle Sap and support the local community and economy. But time is of the urgency. In the context of climate, health, security, food, and economic crises, promoting prosperity is a concept that might seem aspirational. But building a foundation of a sustainable and inclusive economy where everyone has an opportunity to prosper has never been more necessary, or more challenging. Shared principles and an inclusive economy The latest reports from the Intergovernmental Panel on Climate Change have sounded the alarm as to the urgency of dealing with the climate crisis. And in the coming weeks we’ll see the results of the World Bank’s Findex report, which will shine a light on the progress that’s been made toward greater financial inclusion—and highlight areas where more needs to be done. But we must not look at these as separate and distinct efforts. Achieving a global, sustainable and inclusive economy is no small feat. It is work that requires the collective action, commitment and collaboration of the public, private and civil sectors. It’s for this reason that Mastercard has been focused on connecting the ‘why’ of our purpose to the ‘what’ of our fundamental business strategy so we can deliver long-term growth for our shareholders, build trust with stakeholders, and contribute to a more equitable and prosperous world. Only by leveraging the experience and expertise of each sector can we hope to deliver greater societal impact. It requires collaboration like that achieved through the Edison Alliance and the development of shared principles for an inclusive economy that encourages a joint approach to financial inclusion and brings together all participants as co-creators of a financial system for all.
Digital solutions for modern problems And it requires building better avenues to get necessary resources to those who need them with urgency. As the pandemic quite literally brought the agriculture supply chain to a standstill, we worked in India with the Government of Andhra Pradesh to digitally connect and enable farmers to sell directly to buyers, not only resulting in fewer losses but also driving upwards of fifty percent higher earnings for rural families. Every generation has, in its moment, believed it faced unprecedented challenges. Ours is no different. Indeed, it is hard to imagine a more complex and urgent confluence of challenges than the one we see before us. The good news is that there is greater willingness than ever before in the private sector to engage in these issues. The charge for all of us—in the public, private and social sectors—is to bring each of our assets and perspective to the table and to find new and innovative ways to work together toward the common good.
This article originally appeared on weforum.org.
Over the next few years, tech innovations will integrate consumer journeys across physical, digital, and virtual environments, radically expanding omnichannel retailing and creating powerful new touchpoints for brands. Our lives will weave in and out of virtual and physical worlds as new experiences come to life through augmented reality (AR), virtual reality (VR), and mixed reality (MR) platforms that leverage 3D displays and 3D audio, speech recognition, and spatial sensing. In this not-too-distant future, shopping could start with AR at home, include MR in stores, and leverage non-fungible tokens (NFTs) and digital twins in VR environments. You might immerse yourself in a virtual version of your living room to try different furniture and color schemes. Or you may test drive a car, customize its options, haggle with a robot salesperson, arrange financing, and schedule delivery through a VR headset. In-person, virtual, and augmented digital experiences are already merging. Brands including Nike, Ralph Lauren, Balenciaga, Burberry, and Gucci are creating immersive experiences that blend shopping, socializing, and entertainment. Ariana Grande and Lil Nas X have drawn millions of people to—and generated millions in revenue from—virtual concerts on video-game platforms. In China, real estate company KE Holdings uses virtual reality technology to take potential buyers on home tours—increasing sales leads 160% during Shanghai’s recent COVID-19 lockdown. And there is more immersive commerce on the horizon: • The MSG Sphere, currently under construction in Las Vegas, will feature 580,000 square feet of fully programmable LED panels, more than 160,000 speakers, and advanced multi-sensory technologies to create “an entirely new medium for immersive experiences.” • A major American entertainment studio, ViacomCBS, is exploring how to take its entire catalog of content “into mixed reality to be consumed on next-gen immersive displays.” • Roblox, the gaming platform, is developing an immersive advertising system it envisions as a “parallel economy” where brands can introduce their virtual experiences to Roblox’s 43 million daily users. This technological opportunity to transform commerce and forge deeper connections with consumers is not lost on other companies. CB Insights reports that use of the words “immersive” and “metaverse” have spiked during companies’ earnings calls this year. Mentions of virtual reality (VR) and augmented reality (AR) are on the rise, too.
Into the Metaverse Many immersive commerce experiences are taking root within metaverses—shared online environments that blend AR, VR, social media, and cryptocurrencies so users can interact, transact, and create. This concept is most advanced in video gaming, where players, represented by digital avatars, enter simulated spaces to socialize, play, build new worlds, buy in-game goods, and participate in fledgling economies. While immersive commerce is gaining attention in the news media and corporate boardrooms, it’s at a nascent stage of development. We cannot yet move fluidly or carry NFTs between these early metaverses. They are siloed and lack operability. As they develop, however, new platforms will establish fully functioning economies where individuals and businesses create, own, invest, buy, and sell. Today, it’s estimated that more than $150B is spent annually within gaming and eSports environments. As the quality of virtual environments improve, new ways of engaging in immersive commerce will emerge and become increasingly commonplace. Citibank estimates the metaverse market will be worth $8-13T by 2030.
Mastercard’s Role At Mastercard, we are excited to leverage our technology and capabilities to help partners seize these opportunities and drive innovation, brand loyalty, commerce, and compelling consumer experiences. Our focus areas will include enabling frictionless interoperability and ensuring we bring trust and security to immersive journeys. Here are a few specific steps Mastercard is taking: • Our Data & Services teams have expanded their consulting services to cover NFTs, cryptocurrencies, and open banking. • Mastercard Foundry's Labs as a Service team actively collaborates with customers on metaverse projects. • Within the digital asset space, we’ve partnered with Coinbase so people can use their Mastercard cards on its NFT marketplace. • We acquired CipherTrace, a leading cryptocurrency intelligence company, to ensure cutting-edge security and insights. This work is routinely built upon collaborative partnerships, including alliances with central banks to advance public-private digital currencies (CBDCs), fintechs to provide consumers with crypto card options, and blockchain companies to create the optimal digital asset infrastructure. At the same time, we’re testing and exploring new technologies and applications in metaverse platforms. For Pride Month, we have partnered with the virtual social world Decentraland and MetaPride Land to launch a digital space for the global LGBTQIA+ community. Metaverse Pride features curated content, entertainment from international music icons, and Mastercard Pride Plaza—which will host events and activities. The transition to fully immersive commerce will happen gradually through experimentation and risk-taking by contributors, both large and small. Ultimately, the market will decide what's valuable, what lasts, and how the future of commerce will evolve. Mastercard’s place is at the forefront of this technological transition to ensure consumers can securely and seamlessly engage in these experiences, whatever shape they take.
The latest edition of Mastercard Signals explores the technologies and trends shaping the future of commerce. Read .
Mastercard Signals: Reimagining
Digital Commerce
Central banks have played a vital role in the financial system as the key source of trust underlying monetary systems around the world for hundreds of years. In response to global trends and local needs, many central banks are now evaluating the benefits and challenges associated with offering a retail central bank digital currency (CBDC) for the general public to use in day-to-day payments. Indeed, 86 percent of central banks report that they are actively weighing the merits of a CBDC for their economies. Mastercard has been engaging in discussions with many central banks to better understand their objectives and to help them evaluate various approaches and design options. We bring to these conversations our experience running complex, interdependent global payment ecosystems operating in real time. Prompted by the impact of the COVID-19 pandemic, we’ve seen just how critical digital payments are to supporting the continuous operation and growth of the global economy, and how enthusiastically people and businesses have embraced them. Digital currencies increasingly show potential to become a part of everyday commerce, and we are committed to supporting the industry to realize the benefits of this potential and to support the future of payments. Innovative new solutions for sustainable and inclusive economic growth can benefit everyone, everywhere. Central banks developing CBDCs can benefit from many of the hard-won lessons and sophisticated tools that private sector payment networks have developed for their retail payment systems over the past half-century. Mastercard is committed to helping central banks explore the opportunities CBDCs present and sees itself playing a critical role in enabling and supporting new digital networks like CBDCs from an infrastructure, applications, and services level. To support central banks in their exploration, evaluation, and design of CBDCs, we have developed a full range of services, beginning with evaluating the case for retail CBDCs through to testing, deploying, and securing them.
For more information, read the .
white paper
It’s one thing to find out a small monthly payment didn’t go through. It’s quite another when that payment is your rent. When there are hiccups with big monthly payments, everyone feels the pinch. They can find themselves, at best, dealing with the friction between parties and scrambling to find different ways for the payment to come through and, at worst, paying large penalty fees. Now merchants can use advanced data analytics and machine learning to make the payment experience safer and smarter for everyone. Mastercard is launching two new Smart Payment Decisioning Tools, Payment Success Indicator and Payment Routing Optimizer, part of Finicity’s open banking suite of services that enables payments and account creation seamlessly and securely. “By fundamentally improving the payment experience and solving real-world challenges, we are delivering new technologies to offer more ways to pay with greater speed, convenience and confidence,” says Chiro Aikat, executive vice president for Product & Engineering, North America at Mastercard. Bilt Rewards Alliance, a collection of more than 2 million rental homes across the country that lets renters earn points by paying rent, will be one of the first fintech partners to launch Payment Success Indicator. “Our mission is to help renters get the most value out of one of their biggest expenses, and returned payments create significant expense and friction for both residents and landlords,” says Ankur Jain, founder and CEO of Bilt Rewards. “Payment Success Indicator should significantly reduce the potential for returned payments, delivering a digital payment experience that works harder and smarter for everyone.”
By DeAnn Zebelean, communications at Finicity, a Mastercard company
Seemingly every day, each one of us is barraged with a never-ending stream of urgent requests and so-called “opportunities” across an ever-expanding network of apps, platforms and IoT devices. These examples are only the most obvious threats, ones we can—hopefully—easily identify and defuse. But in our hyperconnected world, we may not always be aware of where we are vulnerable. The small businesses we support are under increasing threat, with cybercriminals exploiting the rapid transition to e-commerce during the pandemic. So too are local governments—a forthcoming report by RiskRecon, a Mastercard company, reveals that 41% of American cities do not have information security programs strong enough to protect their data assets, making them vulnerable to data breaches and ransomware attacks that could upend essential city services. Even larger companies with more cybersecurity resources struggle to properly safeguard their businesses when employees work from home over less secure connections, or find themselves at risk from bugs in ubiquitous pieces of software. They also fail to appreciate the risk posed by third-party vendors—or vendors of those vendors, often many steps removed from their core business. A decade ago, mobile banking and digital payments had just begun to take off, but the connections within the ecosystem were still clearly defined and well protected through industry standards and protocols, limiting the risk of large-scale fraud and cyberattacks. Today, the digital explosion has created exciting opportunities for people and businesses of all sizes—and many more points of vulnerability for all of us. It’s not enough to protect each transaction. We must work together to protect trust in every interaction, taking what we all have learned in managing individual risk and bringing those best practices—and developing new ones—to the rest of the cyber realm. That means continuing to set the digital standards to fortify trust, and collaborating with government agencies and other private-sector companies to quickly identity emerging threats.
to learn more about the Global Cybersecurity Alliance Program
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It also means evolving our focus on risk, taking an outside-in approach to assessing and guarding against the vulnerabilities of our vendors, suppliers and partners, as we do our own. These “third-party risk” attacks are projected to account for 60% of cybersecurity incidents this year. We are only as strong as our weakest link, but companies large and small may not have a full understanding of who is participating in their ecosystem and being trusted with access to sensitive data and operating functions—or if they do, is that information current? Could it change tomorrow? Would they be ready if it does? That’s why we launched the Global Cybersecurity Alliance Program earlier this year, which provides user-friendly APIs to extend cyber-risk monitoring and scoring to our partners’ customers—and why we are excited that Interos, an industry leader in systemic risk management, will be joining the alliance. This holistic view of risk can save time and resources, reduce potential financial losses and give companies and governments the opportunity to focus on what they do best—serving people. A more proactive, forward-looking attitude toward cybersecurity will support innovation while infusing trust across the digital economy. A systemic approach to risk makes us all stronger.
Global Cybersecurity Alliance Program
To many online shoppers, it seems like trees are everywhere nowadays. Each purchase of a new T-shirt comes with a promise: “Buy our product and we will plant a tree for you.” A savvy customer asks: How much of my purchase will pay for that tree? Where will it be planted? Who will plant it? What kind of tree will it be? As the private sector begins to invest in planting trees and restoring forests at a larger scale, companies’ sustainability and social responsibility teams are asking similar questions: How can I ensure that my investment is creating a real impact? How can tree-growing projects help my company achieve its goals to fight climate change, protect biodiversity and support local communities? At Conservation International and World Resources Institute, we are asked these questions by our private-sector partners every day. We often respond with an analogy: Planting trees isn’t like buying a soda from a vending machine. You can’t insert a dollar, press some buttons and expect a mature tree to come out. Successful tree-planting efforts require a deep understanding of an ecosystem, how people use the land and what species work best there. Planting a native tree in the Amazon to protect biodiversity looks a lot different than planting a mango tree to provide a Kenyan farmer with a new source of income.
from World Resources Institute and Conservation International
Read more
on the Mastercard Newsroom
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Mastercard expands the Priceless Planet Coalition’s forest restoration effort
Restoring Brazil’s rainforests isn’t just about carbon and trees—it’s about people
How local communities are reforesting parts of Africa, one seedling at a time
This farm’s crop is oxygen. How regenerative agriculture can battle climate change
The National Health Care Anti-Fraud Association (NHCAA) estimates that financial losses due to healthcare fraud are in the tens of billions of dollars each year, with some government and law enforcement agencies placing the loss as high as 10% of U.S. annual health outlays, or more than $300 billion a year.
By Amyn Dhala, vice president for Cyber & Intelligence at Mastercard
To learn more about Mastercard and Milliman’s proof-of-concept, read the
case study
Recognizing not only the devastating effect of these losses on healthcare providers but also the potential health impact on people, Mastercard and the Milliman Payment Integrity (MPI) group coupled their technologies to enhance the detection of suspected healthcare fraud, waste and abuse (FWA), with truly remarkable results. Milliman Payment Integrity is a multifactor, rules-based solution that audits health insurance claims to identify potentially inappropriate billing or providers engaging in FWA. Working with Milliman, Mastercard’s team of data scientists used its six-step AI model development process, AI Express, to develop three AI models that would leverage outputs from the Milliman Payment Integrity solution: a model to score provider-level risks, a model to evaluate claim-level risks and a combined model to evaluate the intersection of claims and providers. “We worked in heavy collaboration with Milliman’s team to formulate our list of questions and hypotheses,” says Tim McBride, Mastercard director of Healthcare Product Development and Innovation and an accredited healthcare fraud investigator (AHFI). “We started with a sample of data and then worked with the full dataset to tease out the fraud results over and above what the legacy system had been detecting.” An ensemble model was built that combined a provider risk scorer, a claim evaluator and a decision enhancer using both supervised and unsupervised methodologies. “We looked at the top ten provider specialties using scores above 800 (out of 1000, which is the highest risk score),” McBride says. “We then took the top two of each of those ten specialties and reviewed the data, creating a summary of those results. Among those were laboratories, family practice, oncology, and palliative and hospice care.”
The results were astounding. The final proof of concept showed that 70-80% of claims paid to the flagged providers raised concerns about risk. The new model identified more than $239 million in recoverable claims income from 2,700 high-risk providers (with a score of 800 or above on a scale of 1-1000) for fraudulent claims for just one mid-sized Milliman payer client. Detection was increased three times at the claim level. In addition to cost savings, these findings affect patients’ quality of life. The audit uncovered situations such as patients in a hospice being administered unnecessary, extensive diagnostics, and a cardiologist operating out of a private residence who was submitting billings for unusual procedures and prescribing drugs inconsistent with his specialty. “The Milliman Payment Integrity team is excited about the enhanced fraud, waste, and abuse detection capabilities we can now offer our clients through the Mastercard FWA AI model,” said David Cusick, a Milliman principal. “Our proof-of-concept with Mastercard shows there is a very compelling value proposition when coupling our existing technology solution with Mastercard’s advanced AI and machine learning capabilities.” Milliman clients who license MPI can now access the Mastercard AI Model for these enhanced FWA detection capabilities.
By Silvio Piserchia, global segment lead for fintech and digital at Mastercard Data & Services
Read the full article, , on the D&S website
“After the findustrial revolution: How neobanks can continue to thrive”
Compared with its steam-powered counterpart, the findustrial revolution was swift. In only a few years, financial technology (fintech) revolutionized finance. Fintech-enabled neobanks put much of the focus on banking, and some now rival traditional banks in terms of customer numbers. An emerging parity with traditional banks is testimony to the success of neobanks. But disruption was the easy part, and neobanks are now under intense pressure to go beyond core banking services. As Alexis de Tocqueville once mused in his writings on revolution: “The most difficult part to invent is the end.” The pressure is coming from many sides. Spiffy branding, streamlined interfaces, smooth onboarding and competitive pricing were enough to pull a unicorn out of a hat just a few years ago. Traditional banks then caught up and now offer much the same along with a host of other financial services. And any strengths on the tech side of fintech can be dampened by less obvious shortcomings on the fin side. A seemingly minor compliance issue can suddenly become a major problem that deters customers and upsets regulators.
At home, those customers and regulators are increasingly expecting the same of neobanks as of traditional banks. That is high praise. But customers can be hard to please, regulators harder still. Go abroad, and new problems emerge. Customer expectations and government regulations are rarely the same across markets. Still, neobanks are well positioned to handle the pressure. With one foot in banking and the other in fintech, neobanks are uniquely able to absorb the deep expertise of traditional banking and blend it with the revolutionary fervor of fintech. The challenge for a traditional bank to integrate new technology with legacy systems can be far greater than the challenge for a neobank to proactively catch shortfalls in financial expertise early. Neobanks are also not awash with data and are used to looking outside themselves for support. Their nimbleness means they can take minimum viable products to market quickly and are not beholden to physical branches—both useful traits when expanding globally. De Tocqueville suggests that inventing an end to disruption is like coming up with an ending for a novel. Neobanks have earned their status alongside traditional banks. Now they just need to complete the story and ensure it is a good one.
“After the findustrial
By Sarah Glaswand, director for global SME corporate leadership
Read the full article, , on the D&S website.
“Strength in numbers: Coordinating small businesses
What small businesses lack in size, they make up for in numbers. Governments can coordinate small businesses across the tourism sector to create the same economies of scale and liquidity that large businesses rely on. Most of the world’s businesses are small. Unsurprisingly, most businesses operating in the tourism sector are also small—80% according to the latest estimate by the World Travel & Tourism Council. Yet small businesses in tourism differ from their counterparts in other sectors. The phrase customer journey is not a metaphorical term but a literal description of how tourism works. It’s not a purchasing journey in just one industry; it’s a journey involving multiple purchases across multiple industries with different working capital requirements, funding needs, and payment terms. And the journeys often begin and end in faraway places. Governments and their associated destination marketing organizations (DMOs) can help streamline and simplify those customer journeys while empowering small businesses.
Tourists—particularly international ones—come from different areas with different expectations. In a space once dominated by traveller’s cheques and cash, flexibility is essential. There’s a reason package tours try to make everything convenient for consumers, and a similar model should extend to payments. DMOs and payment networks can bring small businesses together around coordinated and standardised payment solutions to accompany tourists on their customer journeys. The approach could also help DMOs establish integrated tourism engagement platforms and marketplace websites. That’s important for micro businesses that can’t support an app of their own but still want to sell their goods and services online, increase their visibility, and attract more customers.
A DMO’s integrated tourism app could also serve as a loyalty hub that boosts revenue by encouraging more purchases within the ecosystem while keeping it secure. That matters in a sector where small businesses don’t necessarily benefit from offering rewards programs. While a large hotel chain can offer a program to a customer looking for a familiar brand in multiple locations across different journeys, a small business might operate in only one location, hosting tourists just once during a journey. As a result, the small business won’t necessarily benefit from offering its own rewards program, but its integration into a DMO’s rewards program could increase trust, which is often difficult for small businesses.
Strength in numbers The sheer number of small businesses in the tourism sector reflects their importance. A coordinated ecosystem, which seamlessly stitches customer journeys together from start to finish, could be a viable solution to help streamline and simplify customer journeys while empowering small businesses.
Governments and DMOs can also address the tourism sector’s seasonal liquidity challenges by using payments to connect businesses across different management platforms. A central list of buyers and suppliers in the tourism sector could pull small businesses together in an industry-agnostic directory to unlock cashflow efficiencies.
in the tourism sector”
“Strength in numbers:
By Stephen Grainger, executive vice president for Cross-Border Services at Mastercard
The coronavirus pandemic transcended borders in the most literal sense. With international travel halted and government boundaries sealed tight, cross-border payments helped keep millions of people and businesses afloat. With resources around the world stretched dangerously thin, people were able to send financial relief to loved ones, and companies were able to keep international operations running. Mastercard’s second annual borderless payments report reveals just how critical cross-border payment services have been. Of all consumers surveyed who sent a cross-border payment last year, around 40% said their family members living internationally would not have survived financially without the funds. The impact was just as striking among businesses: Approximately 70% of small and medium enterprises (SMEs) surveyed say the global payment network helped them endure the pandemic. Our 2022 report highlights cross-border payments’ essential role for individuals, businesses and economies over the past year. One of our most notable findings is how impressively digital solutions performed. As COVID-19 lockdowns forced consumers and businesses to quickly shift to digital channels, both groups have become increasingly comfortable using desktop and mobile platforms to send and receive international payments. This newfound confidence continues to transform the cross-border payment landscape. Mastercard is driving this transformation by partnering with our customers to make cross-border payments safer, quicker and more predictable. Mastercard Cross-Border Services provide consumers and businesses a single secure, convenient and certain way to send money to bank accounts, mobile wallets, cards, or cash payout locations around the world. Seamless international payment services will no doubt remain crucial for keeping individuals and businesses financially connected to one another—and keeping the global economy moving.
To learn more, read the .
Borderless payments report
By Hayden Harrison, manager for marketing and communications at Mastercard
Smooth sailing with digital cross-border payments
Until very recently, cruise ship workers were paid in cash. Even today, paymasters or pursers on some ships load a pallet of bills, usually U.S. dollars, and count out individual wages for every crew member each week. It’s not hard to imagine the problems this system creates. For cruise ship operators, it’s expensive and time consuming. Transporting a hoard of cash is a huge security risk. Carrying envelopes of cash is also risky for workers on ship. When they do get paid, it's hard for crew members to spend their cash, and even harder for them to share it with family back on shore. Many or even most crew members remit money to family, friends and neighbors back home to help with basic living expenses. When they are paid in cash, the only way to send money is by visiting an exchange house on shore. These cross-border transactions can be slow, unpredictable, and difficult to track. Fees can also be costly, especially for smaller payments sent to fill an urgent need. And that’s if the crew members manage to get ashore. Depending on their responsibilities, crew aren’t always able to get off the ship at port. They may have to take the risk of relying on others to send money on their behalf. Digital cross-border payments are eliminating many of these headaches and connecting crew members to family members back on dry land. Specifically, Brightwell developed a digital payroll solution that allows employers to pay wages by direct deposit to a worker’s bank account or onto a prepaid card.
For cruise line operators and merchants—Brightwell’s direct customers—the solution all but eliminates complication and risk. Rather than load, count and distribute packets of cash, customers submit a single batch file for payment, benefiting from huge cost, time, and resource savings. The solution also provides high-level insights into how crew are saving and spending their earnings, which helps employers provide welfare and services that more effectively support crews’ personal well-being. But by far the biggest beneficiaries are crew members and their families. Using the Brightwell Navigator app or website, crew members can send money to loved ones in more than 120 countries around the world in a few taps of their smartphone. Crew members are taking full advantage of this new feature. About 90% of Brightwell Navigator users send money abroad. Brightwell’s remittance capability is powered in part by Mastercard Cross-Border Services, which allows people to make international payments to bank accounts, mobile wallets, cards and cash pay-out locations in more than 100 countries and 50 currencies. The integration of Mastercard Cross-Border Services with the Brightwell Navigator app helped to make the service more user-friendly—especially for users with limited digital skills or financial experience. Senders know in advance exactly how much the recipient will get and when the funds will be available, and get instant confirmation when the transaction is complete. Family, friends and neighbors can receive funds quickly and reliably to their bank account or mobile wallets, or collect in cash at a range of safe and convenient branch locations. Transactions are fast, secure and predictable and come with the wide trust and recognition of the Mastercard brand. Brightwell’s solution, which now supports more than two-thirds of the cruise payroll industry, is a powerful example of how digital solutions are connecting workers and families—even when every payment is an overseas payment.
After more than two years of lockdowns, quarantines and sheltering at home, the way we live, work, and do business today is more digital than ever before. And smartphones have become our go-to destination for shopping, socialising and managing our money online.
With Digital First, consumers can more easily self-serve with more robust card management features, resulting in a 40 percent average reduction in customer servicing costs. Less need for physical cards helps Digital First customers achieve operational efficiencies such as reduced costs and environmental impact of plastic.
By Grazia Fedele and Lora Mateeva, Mastercard
With Digital First, we have designed a consumer experience that mirrors the lifestyle of today’s generation. With simplicity and security as our guiding principle, it’s a full-service solution to help Mastercard issuers be consumers’ digital first choice. But don’t just take our word for it. Our study of Digital First issuers with Kaiser Associates in early 2022 found that issuers improved new customer acquisition by 10-15 percent after introducing digital first solutions. Mastercard Digital First customers have found that the proposition’s attractiveness to younger consumer segments helps to grow financial inclusion and engagement.
Digital First issuers also reported increased adoption of other products and overall higher spend: Users saved more in their accounts, used more of their credit, and adopted more banking products than non-digital first users, with approximately 15 percent more purchase volumes on digital cards. Improved security is an additional benefit of offering Digital First. Tokenization and seamless access to card controls and alerts deliver a 20-25 percent reduction in fraud volumes compared to transactions made with traditional cards, helping to combat economic crime and the funding of criminal activities:
These same features contribute to an estimated 50 percent fewer chargebacks. Meanwhile, increased approval rates translate to higher online sales for merchants and overall customer satisfaction.
“It’s hard to overstate the benefits that the Digital First offering, and more specifically tokenization… has had in terms of reduced fraud since these benefits extend to merchants and consumers, not just us.”
— Business development lead, medium-sized issuing bank in Latin America and Caribbean
“Especially during COVID, we have seen higher uptake among a younger audience. The Digital First offering has made 18–22-year-olds far more likely to open a bank account.”
— Consumer experience lead, neobank in Europe
~40%
average reduction in customer servicing costs
average increase in new customer acquisition
10-15%
average increase in transaction volumes
~15%
reduced fraud for digital first transactions
20-25%
Deliver a world-class digital journey with Mastercard Digital First. Visit our .
Developers website to learn how to get started
“Our traditional card portfolio has 60-65% approval rates for card not present transactions while the Digital First product has 90-92% approval. This has a sizable impact on customer satisfaction and willingness to make online purchases.”
— Product director, large issuing bank in Latin America and Caribbean
Southeast Asia is riding a digital wave. With 500 million people entering the workforce in the next 10 years, countries will need to prepare for new digital opportunities. In Indonesia, Mastercard Academy 2.0 is working to equip students, workers and entrepreneurs with the skills they need to succeed with a focus on three key approaches. Get to know some of the people skilling for a digital future with Mastercard Academy 2.0
Inspiring girls with STEM: Meet Indah
Indah is a 14-year-old high school student in Bandung, Indonesia, who dreams of becoming a doctor. She is enrolled in the Mastercard Girls4Tech program—part of a skilling initiative called Mastercard Academy 2.0—where she and over 30,000 girls have access to web-based learning on STEM topics such as data analysis, algorithms, encryption, artificial intelligence and security. She hopes to one day use this knowledge to create a healthcare app to support rural communities. Learn more about how Mastercard Academy 2.0 is working to empower 100,000 Indonesians with the skills they need to succeed in the digital economy.
Growing cybersecurity talent: Meet Robbi
Muhammed Robbi Sukarno is an 18-year-old network engineering student in Bandung, Indonesia. He enrolled in Mastercard Academy 2.0 to gain the skills he needs to reach his dream of becoming a technology expert. He’s now the first vocational student in Southeast Asia to receive a leading global cybersecurity analyst certification. Mastercard has helped more than 3,600 vocational students, like Robbi, get trained to become cybersecurity analysts, in partnership with InfraDigital Foundation. Learn more about how Mastercard Academy 2.0 is working to empower 100,000 Indonesians with the skills they need to succeed in the digital economy.
Empowering small business owners In Indonesia: Meet Rangga
Rangga Septiana is a 30-year-old factory owner in rural Indonesia. His factory processes cotton used to create countless medical supplies. When Rangga saw his business growth plateau, he knew it was time to take his business online to reach more customers. But like many entrepreneurs, he struggled to find the right guidance, tools and resources to take his business to the next level. Learn how Mastercard Academy 2.0 is working to empower 100,000 Indonesians, like Rangaa, with the skills they need to succeed in the digital economy.
Unleashing the power of women entrepreneurs: Meet Marlita
Marlita Tenorio Gonzales runs a sportswear business in the Peruvian capital of Lima. The COVID-19 pandemic pushed her business to the brink, but she was able to pivot and rebound, with support from CARE’s Ignite program, a partnership with the Mastercard Center for Inclusive Growth. Through the Ignite program, Marlita has gained access to tools and training to build her financial resilience and bring her closer to her dream of expanding her business internationally.
Prior to 2020, when the term parametric insurance was used, it was often met with scepticism or perceived as a novelty. Conservative insurance folk would highlight the shortcomings of parametrics comparative to traditional total loss coverages. The profile of recent climate events and COVID has highlighted the need for more tools and resources to mitigate risks. The litigation around non damage BI in the UK courts and the coverage of numerous pay-outs of parametric programmes for natural catastrophes has also helped to elevate the status and demonstrate the critical role parametric insurance has to play. I expect the market to grow significantly in the next 3 years as the penny drops that parametric insurance is about protecting immediate economic wellbeing and not about protecting the totality of your assets. Specifically, I expect to see:
I also expect that much of this will be achieved through multi-party partnerships which bring expertise across insurance, technology, distribution, and payments together to create impactful and scalable solutions in market.
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Mastercard Enterprise Partnerships
• Greater adoption of parametrics as part of disaster recovery and aid initiatives
• Embedded payment solutions which deliver money where and when it can be most impactful
• An increase in use cases across all weather events, renewable energy, consumer lines products and smoothing / hedging of costs for corporations
• Parametric insurance used to build resilience in agricultural communities and to encourage sustainable practices
• New parametric SME coverages which can address cashflow and non-damage business interruption
• Acquisitions of parametric insurtechs by the incumbents
This insight originally appeared in Instech magazine.
Healthcare costs can wreak havoc on consumers’ budgets, regardless of their insurance status, negatively impacting Americans’ ability to seek care. This sad reality is also taking a toll on health care providers as they grapple to collect funds for completed procedures. It’s time to create a more compassionate healthcare payment system. First announced on February 3, 2022, Mastercard has partnered with ARxChange to build the Healthcare Commerce Network (HCN)—a health care shopping platform that allows patients to see how much a non-urgent procedure will cost before they commit to it, then receive a custom price based on their financial situation. The HCN was created to assist hospitals adhere to the No Surprises Act, an initiative signed into law by former President Trump. The act requires every hospital in the U.S. to list 300 shoppable medical procedures on its website to protect patients from surprise medical bills. However, it's one thing to go to a website and find the procedure you're looking for, and quite another to pay for it. The goal of the HCN is to help hospitals make it easy for patients to come to their website, navigate it, effortlessly find what they're looking for, and easily pay their bill using their choice of real-time bank transfer or a credit or debit card. When it comes to the simplicity of making the payment, Mastercard’s bill payment solution BillerIQ® will power the payment mechanism within the HCN to make that happen. Having this trusted solution integrated into the platform as a centralized payments hub facilitates an easier bill presentment and payment process, eliminating the need for health care providers to budget for the issuing and collection of paper bills or engage third-party collection services to manage the process for them. I sat down with ARxChange CEO, Joe LaManna, BillerIQ® Vice President, Elliott Goldenberg and Shankar Ram, senior vice president, strategy & operations at Mastercard to find out more about the Mastercard, ARxChange partnership, and how the development of the HCN will create a more compassionate approach to both patient care and their financial wellness.
By Alyssa Romeo, senior analyst for marketing at Mastercard
Shankar, innovation in the healthcare payment space is very important to Mastercard. What was it about the HCN that drove Mastercard to partner with ARxChange on this initiative?
Shankar Ram: Healthcare globally has two big headwinds. One is a lack of price transparency. And the other is the decline in patient affordability. We saw ARxChange as a nimble and innovative company using patented technology that solves for both these pain points. The healthcare network will allow patients to seamlessly interact with hospital websites to get customized pricing for medical procedures based on their own economic conditions, which is powerful.
We can't talk about an e-commerce network without speaking about how the data and payments will flow. Elliott, what role will BillerIQ® have in this undertaking?
Elliott Goldenberg: Partnerships are very important to us. In many instances, our partners are really the main event, right? No different here. ARxChange is the front end. We're really excited to have BillerIQ® perform the role of the electronic bill presentment and payment, which means we have an end-to-end product that goes all the way through the customer lifecycle. It enables payers to be presented with a bill and pay for it through a variety of options, depending on their choice.
Elliott and Joe, you both recently presented a deep dive session about the HCN at the Nacha Payments Conference. What did you want session attendees to understand about the HCN? And do you feel like you achieved that goal?
Joe LaManna: I think we achieved the goal of educating the audience about the overall size of the opportunity and what we hope to accomplish with the build-out of our joint HCN eCommerce capabilities. The fact is that the healthcare market here in the US represents about 22% of total GDP or over $4 trillion dollars a year... and out-of-pocket expenditures by consumers represent about $500 billion of that overall number. This is a massive market, and the market for shoppable procedures represents about half of that $500 billion right now.
As we talk about communicating with the industry in general let's take it back a couple of months. The February 3 partnership announcement included research from a 2021 Mastercard and Morning Consult study about the state of patient financial wellness in the U.S. Shankar, were there any findings in that study that surprised you?
Shankar Ram: I think the study was very useful on many fronts. It was a mix of validation of some of our hypotheses and the lack of price transparency scored high. That makes this engagement of ARxChange pertinent. It was also very surprising to know that more than two in three patients are concerned about their ability to cover costs in the event of an unexpected illness, and whether their health insurance policy will cover the treatments that they need. To allude to what Joe was mentioning, more than half expressed concern about their ability to cover routine costs associated with healthcare. So, there were quite a few aha moments from the study.
Joe, how do you hope the HCN impacts these statistics and changes people's minds about seeking care?
Joe LaManna: One of the things that we talked about, and we spent a good amount of time on was that there's no value in having a conversation about payment if nobody's paying. The reality is that 90% plus of patients today are paying zero towards the retirement of their obligation to a provider. The reason is simple, it's not a technology problem, it's not a process problem, it's an economic problem. As a result, we are excited about partnering with one of the leading fintechs in the world (Mastercard) to help favorably change the healthcare landscape in the 21st century. Together, we can make healthcare more accessible and more affordable for the masses... and to do so by working with some of the leading healthcare providers, institutions, and hospital systems in the world.
Innovation and financial inclusion are major pillars of focus for Mastercard, and the HCN will play a significant role in achieving the goals within those pillars. Each of you can take moment to express any closing thoughts about what's come to pass regarding the HCN and your hope for the future.
Shankar Ram: Mastercard is a company that strongly believes in doing well by doing good. I think the health care vertical presents the perfect opportunity for us to demonstrate living up to this core value. Up to 10% of annual healthcare expenditures in the U.S., $300 billion, are lost due to fraud, waste, and abuse costs each year. So, partnership with innovative companies like ARxChange and products like the Healthcare Commerce Network complement the assets we have at Mastercard. Elliott Goldenberg: I echo everything that Shankar said. I'd add that I've been working in technology and innovation in payments for many, many years now, and one of the exciting things about this job is being able to work with exciting partners and technology such as what Joe brings to bear with ARxChange. Doing well by doing good includes the topic of inclusion into the financial system and the ability for more people to be able to make electronic transactions in a safe, simple, and secure way. I'm super excited about the future, we have a lot ahead of us. Joe LaManna: I have 2 daughters in their early 20's, and anyone with kids knows that this new generation doesn't do anything on the telephone anymore, they do everything online via their phone or laptop. As more and more consumer interactions with healthcare providers naturally migrate online over the next few years, we want to be at the forefront of that sea change and make it easy for consumers to find what they are looking for and to transact with us easily at the "point of commerce". We also want to give these same folks greater access to quality care and (most importantly) we want to help inject more compassion into these daily patient interactions by tying pricing and payment directly to patient affordability. This will serve to change healthcare for the better in the next decade by making healthcare more affordable to the vast number of consumers here in the U.S.
