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Interviews

Jason Lane, MasterCard: "We're transforming the way people securely shop, sell, send and receive money"

Thursday 27 February 2014 | 02:52 PM CET

Navigating the moving panels of payments in EuropeIncumbent market players have a lot to cope with in terms of regulation, technology and changing customer behavior. The payments market is very dynamic and competitive and is therefore expected to grow further, with many incubators entering the market.

The main existing players benefit from a strong basis of active customers. But they have to come up with relevant innovative solutions that meet their needs and expectations in the same way that newcomers do. The latter face challenges in terms of rolling out their new solutions as they do not necessarily have the same customer base.

The plenary key note speaker Jason Lane, Group Executive for European Market Development at MasterCard will share his views on the current market development at the 13th EPCA Payment Summit 2014, to be held in Brussels. Key questions include:

- What is the future role of schemes in the changing market landscape?
- How will the mobile revolution play out for transactions?
- Can payments work without interchange?

This keynote session will be held at 12:00 on 12 March 2014.

How does MasterCard see the European payments market going forward?

The ongoing convergence between the physical and digital worlds is dramatically changing life, as we know it. Convergence is radically altering the day-to-day shopping experience and the habits of consumers. We have already seen consumers shift their online shopping habits away from traditional PCs to smartphones and tablets. But this convergence is also changing the way in which merchants service customers in both the physical and digital worlds. Merchants seek to deliver great experiences to customers across all channels. That’s why, at MasterCard, we’re establishing products, services and standards that address the specific needs of the new digital ecosystem. In doing so, we’re transforming the way people securely shop, sell, send and receive money.

What is the key driver for the uptake of mobile as payment device and the dematerialization of cards toward the cloud?

Every connected device is increasingly becoming a shopping device. And consumers now shop (and will increasingly pay) in whatever way that best fits their needs and lifestyles: from every device they have, with a simple tap, click or touch at the register, in the aisle, within an app, at home, on the go – or anywhere else. In essence, consumers want simpler and faster shortcuts. Against this background, I believe that new payment solutions need to fulfill a number of criteria. They need to be device-agnostic, (i.e. they can be used on any device), one should be able to make use of them anywhere, they should provide enhanced shopping experience (e.g. through ease of use) and value added services and last but not least, they need to be safe and secure.

Which role will online identity play here?

It is no secret that in today’s world, consumers are increasingly present online and share information about themselves online. And while this provides new opportunities, it also raises new questions around the protection of individuals’ data and identity. This is particularly important when it comes to payments. At MasterCard, we are extremely committed to protecting individual privacy and we have leading policies that are above and beyond those of most financial services companies. Most importantly, MasterCard never collects, discloses or uses personally identifiable data, such as cardholder name and address, in its products.

However, as the ongoing convergence of physical and digital worlds is dramatically changing life as we know it, we also strive to develop solutions that meet new consumer habits. New products, such as MasterPass, allow them to host their payment details on a single platform, thereby facilitating and speeding up the payment process, making the whole process increasingly convenient. You could therefore say that the hosting part of an individual’s payment details, contributes to his/her online identity.

What do you think of innovation driven by 'banks opening up' as proposed in PSDii? What does this mean for scheme organisations?

MasterCard is generally in favour of competition in the payments market. The more dynamic the market is, the more innovation we are likely to see. At the same time, one should not lose sight of the consumers’ interests. One has to be very cautious when providing access by third parties to consumers’ bank accounts. The consumers’ account data has to remain safe and well protected. At the moment, I am not sure that the PSD II sufficiently provides for such guard rails.

How will the proposed interchange regulation affect card adoption and cash reduction?

The reduction of cash usage and greater use of electronic payments are goals that MasterCard actively pursues and which are also shared by the European Commission. However, we do not believe that artificially capping interchange will achieve this goal. Experience from countries where interchange was capped, such as in Spain or Australia, shows that card payments became more expensive for consumers and small merchants. While big retailers saved a lot of money, there is no evidence that even a fraction of those savings were passed on to consumers in the form of lower prices. At the same time, card-issuing institutions introduced new fees or increased existing fees for cardholders to make up for the lost revenue from interchange. But if cards become more expensive for card users, they will use them less and revert to what they perceive is a cheaper form of payments, i.e. cash.

What do you think of cryptocurrencies such as Bitcoin?

There will always be new projects in the payment world. This particular space still appears to be at relatively early stages of its development and we will have to see how it evolves. The convergence of the digital and physical worlds is what we are currently laser- focused on. Our aim remains to offer increasingly simple, secure and reliable payment solutions that are accepted everywhere in the world.

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