Mastercard is moving from 'facilitation' to 'flow' biz: Raja Rajamannar

Demonetisation was a game changer. It created an immediate reason for people to experience the ease, safety and security of digital payments, says Mastercard's Rajamannar

We are gearing up to enable the exchange of diverse monetary flows and different kind of interactions across the world, Raja Rajamannar, Chief Marketing and Communications Officer and President, Healthcare, Mastercard, tells Sneha Bhattacharjee.

Given the way digital payments have taken off in India, what does the market look like from where you stand?

There are a few places in the world as exciting and interesting as India when it comes to digital payments. The country registered about 20.3 billion digital payment transactions in FY17-18. However, over 90 per cent of payments in India are still in cash. This is a huge opportunity that Mastercard is trying to address. The government is committed to Digital India and we are partnering with it by increasing the acceptance of digital payments and continuous consumer and merchant education. I believe that much of this growth will be in tier 2 and 3 cities in India, especially from first-time users. The increase in the number of point of sale terminals - from 1.6 million in 2016 to over 5 million today - will also play an important role in this. The increasing awareness, new forms of digital payments such as contactless, and policy push make India a great market to play in for us.  

How has the Indian consumer's perception about the use of plastic money changed in the post- demonetisation era? Have their (credit/debit card) use come down from the peak they saw in that period? What does that say about your industry?

Demonetisation was a game changer. It created an immediate reason for people to experience the ease, safety and security of digital payments. The result was a fundamental behavioural shift from cash to digital payments. The numbers suggest that card usage has grown substantially since demonetisation. Even in the future, cards will be an important mode for digital payments.

Credit cards and airline brands were the ones that actually built the whole idea of loyalty programmes. With many aviation brands across the world shutting down, are the days of loyalty over?

The answer is yes and no. The days of old style, one-size-fits-all loyalty programmes are over. With data-driven insights, marketers can now make loyalty programmes more engaging and meaningful for consumers. With the power of shopping on their smartphone devices, consumers can be encouraged for real-time action through carefully designed loyalty programmes. An average Indian consumer could participate in 10-11 loyalty programmes conducted by retail chains, financial institutions, hospitality, entertainment and airline companies. The key is to design these programmes to suit the business objectives and consumer expectations.

Software and payments are colliding. What does it mean for players like you?

I strongly believe that digital and physical convergence is no more fiction, but reality. In this new world, digital and physical, both work in tandem. For example, a consumer may see a product in store, do a bit of online research, and pay using an app. The entire journey needs to be seamless. Industry estimates suggest that India will have close to 800 million smartphones by 2022. Think of all these devices as means for online search, shopping, making payments, and accepting the same. For a global fintech company such as Mastercard, this is an opportunity to leverage technologies such as internet of things (IOT), artificial intelligence and machine learning, biometrics and wearables to create cutting-edge payment solutions.

How big a problem are delinquencies or non-performing assets for credit card brands in India? How are you addressing this problem?

As a trusted partner in payments, we see our role as enablers in reducing cyber delinquencies to the minimum. As far as cyber delinquencies are concerned, safety and security is our number one priority. We have invested over a billion dollars in the past three years alone to make the industry safer. The investment including our recent acquisitions of NuData and Brighterion has helped us develop advanced fraud detection and prevention tools. For example, Safety Net is an artificial intelligence based tool that constantly surveys the Mastercard network for any signs of large scale attacks and is designed to intervene and resolve any such attacks.

Given the connectivity and access today, a multi-layered cybersecurity defence is the best - and the only - way to keep fraudsters at bay. We have joined with Microsoft and Citi, among others, as a founding member of Cyber Readiness Institute (CRI), an initiative that convenes business leaders from across sectors and geographic regions to share resources and knowledge that inform the development of free cybersecurity tools for SMBs.

What role has your brand played in building awareness, adoption and acceptance of digital payments in India? 

People often believe that cash is safe and has no logistical cost. However, in the last few years, this perception has changed considerably, especially in the urban parts of the country. Awareness and education is the key to do the same in tier 2 and 3 towns. Mastercard’s marketing endeavor in India focuses on the convenience, safety and security of digital payments. We have been working with the Confederation of All India Traders to educate merchants on the benefits of electronic payments. This partnership has resulted in on-ground workshops for merchants. Given the growing use of smartphones in India, we are also reaching these merchants through WhatsApp based educational videos and assist them to start their cashless journey. Our partnerships with Bollywood star Irrfan Khan and cricketer Mahendra Singh Dhoni have resulted in successful mass media consumer awareness campaigns. The insights from these campaigns will help us make our communication more effective and encourage more people to be a part of India’s digital economy.

What are the most important changes that digital payments industry will likely witness in the next 3-5 years and how are you planning to tackle these?

We need to be creative to leverage current and new technologies, business models and channels to drive India’s digital transformation journey. Mastercard is moving from only focusing on facilitating electronic payment transactions to the “flow” business. In other words, we will enable the exchange of diverse monetary flows and different kind of interactions across the world. Partnerships with like-minded merchants, banks, and fintech players will be key to achieve this goal.

Will the cell phone eventually replace credit and debit cards?

As I said earlier, digital and physical convergence is becoming a reality faster than we expected. In India, the growth of smartphone users and the falling cost of internet data will be a major driver of this convergence. Smartphones have caused a fundamental shift in consumer demand and the way that they interact with merchants. Paying for things has evolved from swiping payment cards to tapping, waving our smartphones, punching payment details, or using a wearable ring. Globally, Mastercard is accepted at over 50 million merchant locations, in various forms. I believe there will be a crucial role for cards but the form of payment is likely to change as the world moves from cash to digital payments.