At the new FT Digital Media Conference in London, MasterCard chief innovation officer, Garry Lyons, who runs the company’s research labs in Dublin, gave an outstanding demo of a few of the tech the corporate is operating on, enabling seamless interaction between someone sitting at home of their lounge and stuff happening at the TV. While watching a baseball (generic term), as an example, he was ready to interact with a fringe ad for a pizza company and order a pizza for home delivery, using MasterCard’s MasterPass app to simplify the payment process. It was freaky stuff, made only slightly less freaky by the very fact it was a demo, other than a genuine, live experience.
Nevertheless, if Lyons were representing Google, Shazam, Zeebox or any super-smart tech start-up, it will have come as no surprise, but all this from what the fellow at streetlevel probably perceives as a mastercard company Some within the audience probably found it slightly hard to understand. But then, as Lyons mentioned to me after I spoke to him after the presentation, MasterCard is anything but a mastercard company.
Tech firm
“At its heart, MasterCard is a tech firm,” says Lyons. “We now have 19bn cards in issuance, and last year, we processed £3.3 trillion in transactions, in 150 currencies, across 36m locations. We have 22,000 financial services companies, so we have to run a 21st century payments network.”
And as was clear from his demo, mobile devices are just a little a part of this. “Yes, mobile is essential to us, and we’re busy developing hundreds of prototypes and experiences. Mobile lets you do things can’t do with plastic, and improves the client experience. The optimum mobile payment solution provides a compelling, context-specific experience to the patron, before, during and after the payment.”
MasterCard has a variety of labs worldwide, As well as Lyons’ base in Dublin, there are others in Big apple, Singapore, St. Louis, Sydney and Miami. They were created two and a half years ago, says Lyons, “to let us create next-generation solutions which have payment at their core”.
“They are staffed by the type of people you may find in a startup, people from all kinds of academic disciplines, but who’ve an appreciation of the way technology can be utilized to resolve problems or make people’s lives easier. 80 per cent of them are technologists who haven’t got a payments background. My role is all about disrupting the long run, so it’s good to enclose yourself with those who don’t know an excessive amount of about how things are currently done.”
The labs are split into three divisions: Innovation Management; Technology; and Incubation. The Innovation Management division is tasked with getting the best ideas from numerous sources, including employees, customers, developers and universities, and determining which of them the corporate should move forward with. “We believe that innovation is a repeatable process, so that you can improve how you generate ideas, the standard of these ideas, and how you are taking things to market,” says Lyons.
The Technology team studies technology and consumer trends, and builds prototypes. “It may be something that takes an afternoon or nine months,” says Lyons. “But regardless of the project, a similar philosophy applies: fail smart. So if you’re going to fail, fail as fast and as cheap as you are able to, and learn up to possible from it. We’ve learned lots over the last three years, and where we’ve tried something and failed, we’ve got taken something from it and incorporated it into something else.”
The Incubation division gives MasterCard the facility to have virtual startups contained in the company who’re excited about taking many of the solutions that pop out of the labs in a value-effective way. “It allows us to choose whether the innovation will reach terms of meeting a customer need, revenue generation, and the price to scale,” says Lyons. “It also allows us to draw entrepreneurial talent who can work in a startup environment, but with the advantage of being within MasterCard. They usually can get meetings way more easily than they may in the event that they were engaged on their very own in a startup.”
I put it to Lyons that a number of what he had demoed was moving way past payments. “It certainly is,” he concurs. “Payment is central to the innovations we create, but we recognise the necessity to solve problems for consumers, so it’s not only concerning the payments, it’s about all of the stuff that’s complementary and adjacent to the payment process, making it more seamless. We believe that the digital platform we’re creating through MasterPass may have lots of users on it, and should prove to be a winning solution. We all know that some education may be required, but our aim is to maintain things simple, as the simpler we make it, the more valuable consumers will find it, and the much more likely it’s they’ll adopt it.”
Lyons refused to be drawn on whether the way forward for mobile payments lies with the ancient financial services companies like MasterCard and the banks, or with the OTT players, particularly, the GAFA (Google, Amazon, Facebook, Apple) Gang. In response to the work popping out of the MasterCard labs, as demoed on the FT event, however, if the OTT players are going to win the battle, they’ll have their work cut out.
Garry Lyons is chief innovation oficer at MasterCard