Mastercard to leverage fintech partnerships for greater merchant acceptance

Mastercard looks at all spectrums for growth in India

Global payments company Mastercard said it does not resort to nitpicking over customers, merchants or banking partners, and is looking at all spectrums for growth in India. It is partnering various fintech companies to expand its merchant acceptance network into the underbanked regions.

“We don’t cherry-pick. We try to adapt everything we have built to suit economics of various demographics. I don’t believe that our products are for a select few. Our technology platform will accommodate everyone,” said Rama Sridhar, executive vice-president for Asia Pacific, Mastercard, in an interview to Business Standard.

While Indian domestic card RuPay has been partnering small finance banks for rural penetration, Mastercard said it does not choose between banking partners. Sridhar said that Mastercard will enable payments for any bank, large or small, that the regulator deems fit for banking.

Mastercard will continue to do business in rural areas and enter any market that its partner banks cater to. Banks have historically not ventured into these (rural) areas and have little to do with Mastercard, said Sridhar.

The payments network plans to leverage fintech partnerships in order to drive greater merchant acceptance in underbanked regions. “Acceptance is a critical objective, important to us and the government, as it is necessary to expand acceptance for electronic payments. We believe that there are players beyond the traditional payment providers or banks who will come in and create new merchant population,” said Sridhar.

Mastercard works with various companies across payments value chain — device manufacturers, wallet players, ride-sharing industry, e-commerce players or even social media companies — to drive the adoption.

“Mastercard is not a card company, we are a technology company supporting payments. Any entity that wants to create an experience for customers where a payment is involved needs to do several things — issue and accept instruments, create loyalty, manage safety and security, etc. Mastercard has services, which support all these functions,” said Sridhar.

The network also places a lot of emphasis on mobile phones being an instrument for payment and acceptance as well as a terminal. Mastercard’s tech centre in Vadodara focuses on mobile-first innovations for India as well as the rest of the world. It also has a development hub in Pune, and a centre of analytics in Gurugram.

“There is a deliberate effort on Mastercard’s part to increase solutions made in India,” said Sridhar.

She said that while the company is still looking at the requirements of the central bank’s recent data localisation guidelines, it will have no impact on its development hubs in India.

Sridhar also said that the opportunity to build solutions in India is massive and Mastercard would continue to explore it.

While Mastercard agrees that the business in the underbanked regions is a volume play, it is unperturbed by low margins as the company enjoys economies of scale.

“We are an infrastructure business. We invest in scale for the long term and hence we do not think about every marginal customer and whether it is profitable for us to do business with them.”