 "In India, 95 per cent of the transactions are still in cash: Rob Reeg")
MasterCard is betting big on India. In 2015, the global payment solutions company launched its tech centre in the country. It is now focusing on government initiatives for cashless transactions and working with India’s start-up ecosystem. Rob Reeg, president, operations and technology at MasterCard, talks to Hrishikesh Joshi about the company’s plan for India. Edited excerpts:
What is the update on the tech centre?
Last year, we invested $250 million in setting up the India development centre where we have two main sites — Pune and Vadodara. The Pune site has grown faster than expected. People in Pune and Vadodara are working on more advanced technical products like MasterCard identity check. There are 1,800 people working at both the sites. In terms of headcount, we have active programmes on recruitment and one of the aspects is participation of women in technology. We have doubled the headcount in one year. And our attrition level is very low — at less than 10 per cent.
UPI is just a payment platform. In a country like India, 95 per cent of transactions are made in cash. It is an evolution that is going to happen over a period of time. We need more digitisation in India. For us, any competition is good as it makes us better in the long run. There is space for everybody in the market and that is why payment wallets are so successful.
How do you see adoption of plastic money in India and what is MasterCard doing to increase this?
We are looking for different markets and sectors. We are working in two different ways. One is developing low-cost acceptance and the second is contactless transaction for everyday usage. We are creating an ecosystem to provide safe, secure and convenient transactions. We are focusing on some government initiatives. For example, we are running National Skills Development Corporation's disbursement programme with the Central Bank of India. These transactions are done only through MasterCard and RuPay. Plus, we are handling the entire Chhattisgarh Student Scholarship Programme where students get their transfers on prepaid card. We are also focusing on the SME (small and medium enterprises) sector of India, which is the backbone of Indian manufacturing. With push from the government and consumers, the SMEs are now willing to pay electronically. We have done an SME business index. Competition drives innovation, fundamentally in any part of the world.
What is your take on blockchain technology? Is MasterCard looking for it?
It is an interesting technology and we are working on it. I personally don’t care about Bitcoin but I do care about blockchain technology. We have got two pilots projects. One is complete and the other one is going on. The one which we are looking for is a combination of private and public watching. The first pilot is a private watching solution. I think it is very early in the hype cycle. For a company like us, managing people’s money and the information security aspect of blockchain is a little bit daunting. The idea behind blockchain is unregulated power but that is never going to be a first choice when security is a concern.
But, blockchain is said to be more transparent, faster and safer...
That is what these pilots will help us understand. It important to see how we take this massively distributed environment. We have formed a customer advisory board for this. We are dealing with people’s money and information. We have found some good results in some of the case studies. We have done these with some of our partners and customers.
How are you going to contribute to India’s emerging start-up ecosystem?
We have several different ways of investing in start-ups. For any point of time, we are looking at 40-50 start-up companies at different partnership levels and in different forms. India is a very vibrant start-up market. MasterCard has invested in Razorpay, an online payment gateway solution for SMEs and platforms. We’ll continue to invest in such companies. Some of our programmes offer equipment, mentorship, office space and seed investment. Under our “Smart Path” programme, we partner with start-ups from around the world to help scale their businesses. The programme enables companies to gain access to MasterCard’s global ecosystem and to break new markets through relationships with MasterCard and our customers.
What is the update on the tech centre?
Last year, we invested $250 million in setting up the India development centre where we have two main sites — Pune and Vadodara. The Pune site has grown faster than expected. People in Pune and Vadodara are working on more advanced technical products like MasterCard identity check. There are 1,800 people working at both the sites. In terms of headcount, we have active programmes on recruitment and one of the aspects is participation of women in technology. We have doubled the headcount in one year. And our attrition level is very low — at less than 10 per cent.
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Do you see payment wallets and Unified Payment Interface (UPI) as a challenge for MasterCard?
UPI is just a payment platform. In a country like India, 95 per cent of transactions are made in cash. It is an evolution that is going to happen over a period of time. We need more digitisation in India. For us, any competition is good as it makes us better in the long run. There is space for everybody in the market and that is why payment wallets are so successful.
How do you see adoption of plastic money in India and what is MasterCard doing to increase this?
We are looking for different markets and sectors. We are working in two different ways. One is developing low-cost acceptance and the second is contactless transaction for everyday usage. We are creating an ecosystem to provide safe, secure and convenient transactions. We are focusing on some government initiatives. For example, we are running National Skills Development Corporation's disbursement programme with the Central Bank of India. These transactions are done only through MasterCard and RuPay. Plus, we are handling the entire Chhattisgarh Student Scholarship Programme where students get their transfers on prepaid card. We are also focusing on the SME (small and medium enterprises) sector of India, which is the backbone of Indian manufacturing. With push from the government and consumers, the SMEs are now willing to pay electronically. We have done an SME business index. Competition drives innovation, fundamentally in any part of the world.
What is your take on blockchain technology? Is MasterCard looking for it?
It is an interesting technology and we are working on it. I personally don’t care about Bitcoin but I do care about blockchain technology. We have got two pilots projects. One is complete and the other one is going on. The one which we are looking for is a combination of private and public watching. The first pilot is a private watching solution. I think it is very early in the hype cycle. For a company like us, managing people’s money and the information security aspect of blockchain is a little bit daunting. The idea behind blockchain is unregulated power but that is never going to be a first choice when security is a concern.
But, blockchain is said to be more transparent, faster and safer...
That is what these pilots will help us understand. It important to see how we take this massively distributed environment. We have formed a customer advisory board for this. We are dealing with people’s money and information. We have found some good results in some of the case studies. We have done these with some of our partners and customers.
How are you going to contribute to India’s emerging start-up ecosystem?
We have several different ways of investing in start-ups. For any point of time, we are looking at 40-50 start-up companies at different partnership levels and in different forms. India is a very vibrant start-up market. MasterCard has invested in Razorpay, an online payment gateway solution for SMEs and platforms. We’ll continue to invest in such companies. Some of our programmes offer equipment, mentorship, office space and seed investment. Under our “Smart Path” programme, we partner with start-ups from around the world to help scale their businesses. The programme enables companies to gain access to MasterCard’s global ecosystem and to break new markets through relationships with MasterCard and our customers.