Money is different today. It still serves the same purpose as it did years ago—to purchase goods or services—but the way it is exchanged has completely changed. Credit cards signaled the change from cold hard cash to plastic, and as new tech finds its way into almost every modern consumer, so do new ways to spend.
Interestingly, new payment methods are not developed by your bank. While banks largely working to improve security and offer better access to services, it falls on the biggest financial service corporations in the world to change the way the public looks at cash.
The north star of payments innovation is based on two key values: make it easy, and make it secure, and Mastercard knows that. They are a household name in payments, and their technologies have set the pace for the future of your wallet.
One of the company’s proudest achievements is a process called tokenization. With this relatively new method, anytime a consumer pays through a mobile or digital interface, instead of sending their real credit card number to a retailer, that number is swapped with a token or a code. The merchant completes the purchase without ever having direct access to the consumer’s real credit card number. This process protects from hackers and compromise, letting users feel more secure as they shop through new environments. The best part is that this step is invisible to the customer; if you have used a Mastercard online, chances are you are already benefiting from tokenization.
The onset of technologies like tokenization is brought about by a few select leaders within Mastercard. Though tokenization is a few years old now, the company is constantly innovating as they strive to achieve what consumers did not even think was possible. Think of it like this: Did you know you wanted to tap your card at a terminal to pay for something before you actually tapped it?
That is the kind of question Sukhmani Dev constantly asks herself and her team. As Mastercard’s VP of digital payments and the person who oversees labs similar to the company’s Manhattan tech hub, her role is to commercialize and scale new solutions, starting from small in-house projects and reaching all the way to the company’s nearly 900 million credit cards in circulation worldwide.
What are the biggest Mastercard accomplishments over the last few years?
Tokenization is one. From a payments perspective, it came into being in 2014, and that’s when it was commercialized with the first use case being mobile wallets. A couple of years ago we set out the vision that we want to enable commerce through every single device, and we did that. And now when I talk about tokenization, we’re onto the big fish of all the e-commerce volume we want to tokenize.
The other piece is fighting fraud. Whether you are a small or large merchant, unfortunately with the growth of digital, fraud is becoming bigger every year. We want to make sure there are tools available to you to fight that because it’s detrimental form every point of view. Things like Mastercard Identity Check allow you to fight fraud—but it’s also an evolution. It first came about as Mastercard Secure Code, and now it has evolved.
What is Mastercard’s vision for digital payments transformation?
There is a lot of buzz around new technology, and there are a lot of things we can potentially do, but we stay focused on our mission and vision, and that is: Provide the best digital experience everywhere, make sure every transaction is secure end to end, and give consumers control. Anything we’re building from a global product point of view, those are the three key pillars we’re trying to hammer in.
A perfect example of that is tokenization. A couple of months ago, we said tokenization will be available on all Mastercards across the globe by 2020. We’re progressing really well towards that goal. The idea is that you use your Mastercard and it’s just secure, and there’s nothing you need to do as a consumer because it’s all done in the back end. We enable your card to be available within all kinds of experiences, whether they are more niche like mobile payments and wearables, but also on the e-commerce side. It comes with the benefit of lifecycle management, which is if you get a new card whether it’s reissued, lost or stolen, or expired, we’ll be managing and updating it in the background, so the consumers don’t have to do anything.
How do you weigh rolling out new digital tools compared to digitizing legacy offerings?
We are anchoring everything we’re building against those three pillars I mentioned. We’re thinking of how consumers are interacting and how we solve for those three things: best experience, security, and control, no matter what kind of transaction you are doing. It’s asking ‘What are all these different flows Mastercard consumers want to use, and how can we solve for these three pillars within those flows?”
The payments world is full of “solutions.” How do you navigate the noise and signals to identify real innovation in payment?
The way we do it is by going back to the basics of customer pain points. We’re looking at all of these different kinds of transaction flows that are possible and the associated pain points, and if the basic fundamentals are being met. If they’re not, then can we use all of these cutting-edge technologies available to use to solve for that?
Take AI—the way we view it, we have a pain point like fraud. Can we solve it using AI? That’s what we’re doing with Identity Check. We’re pairing up that difficulty under the framework of our pillars, and then asking if there is technology we can use to solve it. That’s how you cut through the clutter and noise. It’s when you’re really obsessed with the problem you’re trying to solve, and then bringing in the necessary technology. But, that doesn’t mean you don’t need to learn about technology and play it with purpose.
That’s what we call play with purpose—if there is a brand new technology out there, we need to understand how it works and how it can impact this side of the equation. There’s a part of my world which is Labs that is tasked with doing that. Going deep into technology and seeing what it can do for us and marrying it with the problems it can solve.
How then do you balance meeting consumer’s expectations with trend-setting?
I love that Henry Ford quote, “If I had asked people what they wanted, they would have said faster horses.”
It all ties back to understanding the true problem you’re trying to solve. Not how to solve it, because that’s what we’ll always do. It’s truly about the need. Once you crack that—based on consumer trends surveys, data, research, internal sources—all of that goes into finding out what that true problem is and how you solve for it.
It’s the idea that one has to get feedback, early feedback, and iterate upon a design. At the end of the day, there’s a lot of ways to obtain feedback in the early cycles. Then you can change so you land somewhere that you are solving the problem, and then you can scale it. That’s a key focus, because anything we do here, we need to be able to scale it to over 100 countries.
Payment security could include blockchain, biometrics, passwords, etc. How do you identify the most valuable one to focus on?
Whatever you’re building, you need to focus on defense and depth. Secure by design. You need multiple layers of security because it’s not about picking one or the other. For every leg of the customer experience, different technology might solve a problem. The more layers you add, the more robust your solution becomes. It all fits into one thing. You could have an experience where you’re buying online, and your card would be tokenized. Then we might ask you to authenticate yourself using biometrics. All these things work in conjunction. There’s no “or” there.
How are we going to overcome the battle between security and convenience?
It all ties back to design, because there’s still no “or” there. Consumers expect convenience and security and you can’t use the excuse of something being convenient for it to be not secure and vice-versa. When you’re designing products, you need to keep both in check.
For you as a consumer, when you’re buying something online, the merchant sends data parameters to your bank to authenticate you. The bank is doing risk-based authentication in the background. So for you, there’s no added friction. The bank is doing the assessment because they already have all the data. It’s about applying AI to all these parameters to be able to truly say if a purchase is made by you or not. For the one per cent of cases they suspect maybe it’s someone else making a purchase, they can stop you and ask you to verify, using biometrics or something like that. Building intelligence in the backend is needed to remove the onus on the end consumer to jump through hoops.
What opportunities open up with widespread adoption of Mastercard’s new technologies?
You should be able to shop using any device, and it should know who you are, and seamlessly enable you to go through the payments flow. You will be protected from fraud and the merchant will be protected from fraud because it’s all working harmoniously in the background. It might even look like using voice commands to check out. You don’t need any more authentication there.
The other side is the degree of control you will be able to exercise on anywhere your information is stored. Once all these technologies are out there, you should be able to have a single dashboard in your hands to tell you exactly where your payments credentials are stored across every single merchant that has them. If you were to sit here today and count where they are now, you’ll probably miss a whole lot. To turn them on and off, you’d have to go through 30 password resets. All that goes away. There is a single control panel for your world of commerce, and you can see everywhere your data is being used.