Paolo Bortolotto, MasterCard: "We are in the midst of a dramatic, global transformation in consumer behaviour"

Given the fact that, previously, you were Head of Development of MasterCards Debit Products for Europe, could you express what are the main differences between Europe and APAC which require adaptation of your expansion agenda and why?

The biggest difference I have discovered in my time in Asia so far has been the diverse cultural, political and social nuances across the region, and how these ultimately affect what products and solutions we bring to market. Not only does cultural and linguistic diversity exist, but also consumer preferences vary widely, with each market at a varying stage of economic development.

In Europe, because of the various entities that oversee the European Union (e.g. the European Commission, the European Court of Justice and the European Central Bank), the majority of the countries have a unified regulatory framework governing their economy. As a result, the benefits of doing business between the same (or similar) regulatory environments can be realised, compared to Asia Pacific where the region is more fragmented and governments differ vastly.

Although in Asia we are most definitely not behind, on the contrary, with the newly established ASEAN Economic Community, we can look forward to the opportunities greater economic integration will bring in a region of USD 2.6 trillion and a population of over 662 million – the seventh largest economy in the world.

That said, I am convinced that consumer requirements in debit are very similar across the globe and are invariably based on safety/security, convenience and control. These are the fundamental debit consumer needs that we must address and answer to in an innovative and differentiating manner

Recently, the banking system has been widely interested in fintech developments to keep pace with non-bank financial institutions and, hence, retain customers. What else is needed on banks’ side to ensure dominance in the financial services business?

We are in the midst of a dramatic, global transformation in consumer behaviour – and the fintech industry is injecting a great amount of focus on the consumer experience, aiming to simplify day-to-day activities. All organisations will face initial challenges with the advancements in technology, whether they are looking to capitalise on these new developments or learning to cope with the changes.

For banks especially, technology is hugely impacting their customers and the traditional bank-customer relationship is constantly evolving. Banks need to continue to keep their customer front and centre and, at the same time, know how to leverage new technology and trends.

Keeping an open mind and view of their environment will help banks face new entrants and disruptors. Competition should be welcome as it encourages and stimulates fresh ideas and new thinking, incentivizing creativity and innovation to stay ahead.

Having a dedicated team working on bringing innovative payments and commerce solutions to market with greater speed is also a big advantage. At MasterCard, this team is called MasterCard Labs, our global research and development division. They focus on building tomorrow’s payments solutions today. However, we don’t believe innovation should be isolated within one team. In fact, our Labs team works across the various business units in MasterCard, tapping into the different perspectives and insight they each offer. This way, MasterCard can meet consumers’ needs with fresh perspectives.

How would you characterise APAC, in comparison to the other markets, in terms of e-shopper’s card payments preference?

As a region, what makes Asia Pacific so unique is its incredible diversity. It has some of the most advanced, affluent and sophisticated markets in the world including Australia, Singapore and Hong Kong, as well as economies that have only just opened themselves up to the world such as Vietnam and Myanmar.

Thanks to advancements in technology and fast growth, a lot of emerging markets will be able to leapfrog developed countries in the coming years. More developed markets, such as Singapore and Australia, have travelled through each phase of payment evolution from card imprints and magnetic strips to EMV chips and contactless payments. In contrast, lesser developed markets such as India and Myanmar have leapfrogged from people not having access to a bank account to being able to make mobile payments with a simple SMS.

In your opinion, could the complete virtualisation of the debit card, with the help of Cloud-based HCE technologies, for example, help boost ecommerce operations globally?

Globally, we’ve seen ecommerce take off with industry projections estimating it to hit USD 1.5 trillion in 2018. MasterCard’s latest research found that consumers in Asia Pacific have a real appetite for digital wallets with one in five using them – a two-fold increase from two years ago. Mobile shopping is also becoming increasingly popular with one in two having made a purchase using their smartphone in three months.

Cloud-based HCE technology enables digital wallet providers and merchants to ride the digital wave that is fueling the growth of ecommerce by no longer restricting them to secure elements being embedded in devices. With increasing smartphone penetration, more users around the globe are able to make payments via their digital wallets across any mobile device without the need to set up new infrastructure.

The fintech industry is constantly coming up with great innovations. In the long run, consumers will develop a natural affinity to the app, technology and payment method that best suits their lifestyle needs.

At MasterCard, our objective is to deliver simple and secure ways for a seamless commerce experience – be it instore or online. We do that via our digital wallet initiative MasterPass, contactless payments, mobile Point-of-Sale devices and working through various third party wallets including Android Pay, Apple Pay and Samsung Pay.

In your new position as Head of Debit for Asia Pacific region at MasterCard, what debit card business expansion strategy would you consider in order to attract more clients, be it corporates or consumers?

There are many varied markets in Asia and one solution will not fit all especially in terms of banking infrastructure and regulation. This means we must first address what is at the heart of the consumer and make sure we are adding value where it matters whatever the market infrastructure. First and foremost safety and security is top of my agenda.

We are and have addressed many of the fears of consumers in the security area. MasterCard has invested hundreds of millions of dollars to ensure safety—including superior network performance and reliability—and security form a major part of our products, our system, and our network. Second we have and are building an even stronger acceptance network both in the physical and virtual world where tomorrow’s future is but a second away. Finally it is important that we are at the forefront of helping our consumers to control and keep check of their spending in an economy where every cent is very hard earned.

To this end, we are introducing app based technology to enable consumers to know at any time what they have in their “electronic” mobile wallet and have peace of mind that their finances are under control

In establishing a 2020 projection, would you still see card payments as the dominant payment method in the ecommerce ecosystem?

While 2020 is quite a long way into the future for the ever-evolving technology industry, card payments will definitely remain one of the key payment methods – be it online or instore.

As ecommerce continues to see robust growth rates, the payments industry will continue developing new products and services to better serve consumers in this growing space. However, many of these innovations, while making the online shopping experience more convenient, secure and seamless, currently still hinge on the payment card itself.

Take MasterPass, our digital payments solutions and the “Pays” - Apple Pay, Android Pay, Samsung Pay – for example. While they enable a more seamless and secure shopping experience with and on your smart phone, the technology is still reliant on consumers storing the details of their physical payment cards.

While digital wallets are on the rise in Asia Pacific, consumer behaviour cannot be changed overnight. When companies innovate with the consumers’ needs at heart, people will see its value and are more likely to adopt new payment methods. As more and more consumers recognize the value it brings in securing and simplifying their payments, their cash usage will wane as their payment preference shifts towards these new payment methods.

About Paolo Bortolotto

Paolo Bortolotto is the Head of Debit for MasterCard in Asia Pacific where he drives the development of debit programs from ideation to implementation, working across the business units to deliver well-rounded product offerings. Paolo brings with him over 25 years of experience in the payments industry, most recently from MasterCard’s Debit team in Europe where he successfully exceeded growth targets for the region for three consecutive years.

About MasterCard

At MasterCard, our mission is to use our technology and expertise to make payments safe, simple and smart every day, everywhere. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories.

With over 25 years of experience in the payments industry, I’ve been fortunate to have worked across a diverse portfolio ranging from driving ideation and strategies to developing business plans and implementing new card programs.