Contactless and QR have noticed significant growth in the post-pandemic landscape.
Mastercard is committed to the development of a multi-rail future in which digital payments can move at an increased velocity, ultimately enabling governments, businesses and consumers with the ability to pay securely and in real-time. Excerpts from an interview with Khalid Elgibali, Division President – Middle East and North Africa, Mastercard.
What approach has Mastercard undertaken to enhance payment options and cater to the evolving needs of your customers in the region?
As a multi-rail company that serves merchants, banks, telecommunications organisations (telcos), financial technology (fintech) companies and governments, we at Mastercard are redefining the future of payments. In the context of the pandemic, we have witnessed how technology has come to play an even more significant role in people’s lives. The accelerated adoption of contactless payments, growth in e-commerce and the demand for “digital-first” experiences are just some of the trends we have observed.
Mastercard is working to serve our partners as a single technology provider of choice that connects telcos, digital retailers and fintechs to their customers. We are providing technology solutions, platforms and propositions that enable a superior digital experience and drive greater inclusion for people across the globe. We have therefore sought to enhance our own capabilities through the introduction of innovative products and acquisitions of industry-leading companies.
This originally began with our acquisition of real-time-payments provider Vocalink in 2017, which is currently transforming the payments infrastructure in economic hubs around the world, including Saudi Arabia, the UK, Singapore and Thailand. This was then accelerated through the acquisitions of Transfast, a global cross-border payments network provider, and Nets Corporate Services, which allows consumers to get a payment platform for recurring bill and credit transfer transactions to more than 250,000 corporate companies.
With this, we have managed to add more depth and scale to our Mastercard Send and Transfast technologies, which deliver cross-border payments to bank accounts, mobile wallets and cards. It also makes us a leader in the space, with the ability to provide fintechs with different payments options, value-added services, new standards and data security, and a large portfolio of both card and non-card capabilities.
Mastercard has also been leading the way in the open banking movement and have invested in this space over recent years. Open banking gives people and businesses more control over their financial data, including determining how and where third parties can access their information to provide new services like money management programs or initiate payments on their behalf. Most recently, we entered into an agreement to acquire Finicity, a leading North American provider of real-time access to financial data and insights. The addition of Finicity’s complementary technology and teams strengthens our existing open banking platform to enable and safeguard a greater choice of financial services.
Beyond that, Mastercard continues to invest in our blockchain technology and explore promising use cases. We have an extensive list of IPs in our arsenal, including Proof of Provenance Solutions, Central Bank Digital Currencies and Cross-Border Corporate Payments.
Looking ahead, we continue to lead the market by redefining what’s possible. We provide a unique and powerful offering to support business, government and consumer payment needs across a variety of payment flows. These options benefit different economies through an increased velocity of money, while banks can open up new, safe, simple and secure apps and services for businesses and consumers.
In the UAE, we recently partnered with Emirates Digital Wallet, a company owned by 15 of the largest national banks in the UAE to launch klip – a digital platform that is powered by our Digital Wallet Ecosystem, bringing us closer to a cashless future. The solution will further create opportunities for the UAE’s 1.3 million unbanked residents by providing a platform for them to become part of the financial system. This launch is a true testament to the power of partnerships, as the UAE’s financial leaders come together to help realise the UAE’s vision of a cashless future.
Vocalink is also redefining the region’s payments landscape. Through a partnership in Saudi Arabia with Saudi Payments, a fully owned subsidiary of the Saudi Arabian Monetary Authority (SAMA), we have launched real-time payments that enables instant account-to-account payments between financial institutions, businesses and consumers. This makes it a market-first in the country. We believe the new technology will positively impact the Kingdom’s economy by upgrading its payments infrastructure, significantly speeding up digital commerce and enabling newer fintechs and financial institutions to take advantage of the benefits of a digital economy.
How has Mastercard positioned itself to enable digital transition for clients across the region?
As a global technology leader, we are leveraging our technology, data and know-how to partner with a wide range of traditional and non-traditional partners to build digitally, financially and socially inclusive societies.
For instance, we have partnered with Dubai Roads and Transport Authority (RTA), as part of the city’s smart vision to enable frictionless, faster and more secure public transport tariff payments, while simplifying the journey for commuters.
This falls under our City Possible initiative, which is our model for urban innovation as a global network of cities, companies and communities work together to promote inclusive and sustainable urban co-development focused on addressing pressing urban challenges. We recently launched a global partnership with HSBC as well, bringing together our collective resources, expertise, and integrated urban development frameworks to the network.
Other partnerships to transform the payments chain include the Delivery Hero programme. Here, we have assisted talabat, Hungerstation and Zomato to deliver pay-on-delivery contactless solutions for consumers ordering food across the MENA region. This has helped over 650,000 delivery riders in the region get access to their earnings and a wide range of financial services, while over 100,000 restaurant partners in the region are able to pay suppliers and employees instantly.
Looking ahead, we are excited to be at the digital forefront as the Official Payment Technology Partner of Expo 2020, the biggest event ever to be held in the region. Together, Mastercard and Expo 2020 believe in the power of technology to connect and inspire millions of people, and we cannot wait to welcome the world to the UAE as the nation celebrates its Golden Jubilee.
In your opinion, is contactless payment the future, or would we still be handling cash?
Cash is risky, inconvenient and expensive – it remains a drawback to financial inclusion and growth, which is why it is so important for all partners to work together to build communities that are less reliant on cash and better positioned to take advantage of digital growth. Mastercard helps governments, businesses and consumers transition seamlessly to the world of digital commerce.
Contactless and QR have noticed significant growth in the post-pandemic landscape as consumers demand increases for safer, faster payment methods. During this time, we have helped partners make a seamless transition into the world of digital commerce by providing omni-channel payment capabilities and experiences.
Today, almost one in nine Mastercard transactions at point-of-sale (POS) terminals in MEA are contactless, which was further supported by the introduction of higher contactless no-PIN limits across the region.
There is no doubt that contactless payment technology provides a more seamless way to pay, speed at checkout, more control over physical proximity and peace of mind. A Mastercard consumer sentiment survey noted an increase in the use and adoption of contactless payments, due to the simplicity, safety, speed and cleanliness amidst social distancing recommendations. We believe that this will be a long-term shift, as eight in 10 (81 per cent) respondents in the region said they would continue to use contactless payments going forward.
We understand that to reduce physical contact and the use of cash at their stores, small businesses are increasingly seeking ways to accept contactless payments. That is why we are partnering with acquirers across the region to further accelerate the adoption of this technology with secure mobile acceptance solutions.
What role has Mastercard played in assisting SMEs during the pandemic?
Small and medium businesses are the lifeblood of economies, especially in our region, often providing a livelihood for most people in our societies. When these businesses suffer, everyone suffers – in a world so deeply impacted by the pandemic, supporting this community is one of the single most important tasks right now.
At Mastercard, we are committed to leveraging our network, insights, technology, and partnerships to help, inform and enable small businesses to sustain themselves through times of crisis.
Representing the vast majority of businesses, and as a result, having a significant impact on employment and GDP, SMEs have the potential to make a genuine difference in many communities if they can be supported with the right tools to navigate challenging times, sustain themselves in crisis, scale and ultimately succeed.
We are committed to powering small businesses through our resilient network, insights, technology, products and services and philanthropic support – including a $250 million pledge globally. By joining forces with different stakeholders – like governments, customers and SME associations – we believe that our collective work will make the world a lot better for our communities and societies.
In the Arab world, SMEs represent 96% of registered companies and employ half of the workforce according to the IMF, yet their access to finance is the lowest in the world: lending to SMEs in the region is only seven per cent of total bank lending.
Therefore, connecting 50 million small businesses to the digital economy is a crucial part of Mastercard’s global goal to financially include 1 billion people by 2025, ensuring inclusive growth that can change communities for the better. We are helping businesses and merchants, while playing a vital and stabilising role in enabling commerce.
Mastercard is also driving digital payment solutions for small businesses to deliver a seamless experience for their customers in a time of need. We can help offer them digital platforms by connecting them with the technology and providing opportunities that could help them generate income, fulfil payments and set out for growth.
An example, as digital channels continue to grow, we have categorised businesses’ needs onto a single portal for convenience via our Simplify Commerce programme through a partnership with RAK Bank. This helps businesses establish an online presence and accept payments across multiple channels through one, bringing ease in running e-stores, invoice management and minimized fraud. This also gives international merchants an opportunity to reach out to target audience cross-country and promote products via social media.
We also recently introduced ‘SME in a box’ across MENA – a low-cost payments solution that enables small business owners to move their businesses online and accept a range of digital payments from their customers, simply by using smartphone technology.
At Mastercard, our data and services are driven to help small businesses with solutions that assess the impact of the crisis on their business and build a strategy for recovery so that they can make the right decisions. We believe in the importance of information and keep them up to date with meaningful insights and data in order to assist with thoughtful business decisions, renewed operations to navigate challenges and take advantage of opportunities and prepare for the future.
This is made easy with the Daily Market Trends Index that gives businesses the liberty to compare markets, forecast and plan.
To help SME owners boost the effectiveness of their marketing and promotions, we also provide them with free insight into retail sales patterns from their industry. With this, they are given the ability to determine if their sales in relation to industry benchmarks and help them make better decisions about their marketing investments and strategies. And lastly, our Local Market Intelligence (UAE) allows acquirers to offer value-added reporting to their merchants. This includes insights in merchant business performance and customer spending and loyalty with benchmark comparison against local market competition.
What do you see as Mastercard’s ultimate role in the current economic landscape?
If there’s one thing that the Covid-19 pandemic has taught all of us, it is the power of digital in establishing connections. As a global technology leader, we see ourselves as a binding force in the digital economy, bringing together various players, be it government, businesses, consumers and financial institutions, to create a thriving world – a world beyond cash.