The way in which goods and services are paid for is going through a period of radical change, creating global opportunities for firms deploying payment technologies. Ann Cairns, president, international markets, at MasterCard, is well aware of the prospects.
With responsibility for managing the company’s markets and customer-related activities outside of North America, Ms Cairns has led the firm’s expansion into new regions and customer segments, and she sees opportunities in all corners of the world. “We’re still in a situation where 85% of consumer payments done in the world are a cash or paper transaction, so we’re only really playing in 15% of our space. There’s a whole world out there that we can expand into,” she says.
“India is going through massive regulatory changes associated with getting rid of certain bank notes,” she adds. “We’re also very focused on China as the Chinese have said they will open up the market to international players. We’ve been in sub-Saharan Africa for a number of years and are opening up [in] new countries there.”
Ms Cairns explains that there are also opportunities in the sharing economy, for example, transportation network Uber, as well as the digitisation associated with smart cities, such as on London's underground metro system. And business is growing well in countries such as Greece due to a government push towards the general adoption of electronic payments.
“Our initial public offering [IPO] in 2006 valued us at just over $5bn and we’re worth more than $110bn today,” says Ms Cairns. “Today, we’re a business-to-consumer company in the technology space. Before the IPO we’d have defined ourselves as a payments company.
“We’ve more than twice [the staff] we had five years ago. We were originally highly centred on North America, but over time our capabilities have been distributed much more globally. The international markets part of MasterCard is over 60% of the business and North America is 40%.”
Fitting the payment model
Ms Cairns says that acquiring other firms is central to MasterCard’s plans to broaden its capabilities and grow its core business. “Whatever we’re buying, we have to consider how it fits with our business and how it enables us to sell more of our core payment capability around the world. For example, we’ve put in a bid to buy VocaLink, which is already used in other parts of the world, such as Singapore, Thailand and Scandinavia.”
The agreement, which is going through regulatory approval, could see MasterCard acquire 92.4% of VocaLink Holdings for about £700m ($920m). Other recent acquisitions include London-based retail consulting and analytics firm 5One and the $600m purchase of Applied Predictive Technologies.
“We’re also opening more labs throughout the world,” says Ms Cairns. “Sometimes we’re doing this in partnership. For example, in Kenya we’ve done it with the Gates Foundation to create new products for Africa.”
The company’s lab in Ireland has developed out of its purchase of Orbiscom. “It’s a good location because there are a lot of other tech companies there and it has a young population with tech skills,” says Ms Cairns. “Turkey is also interesting. You’ve got a lot of millennials there and it’s a skilled market; these are the types of factors that play a part in where we decide to site things.
“Being digital is a big factor to our future growth. We will continue to invest in those markets where there’s a huge underserved population and work with partners in those countries to accelerate out into the white space that defines cash today.”