Mastercard had its eyes on the future from the start of 2019. In the first week of January, the company jettisoned its own name from its iconic logo of interlocking red and yellow orbs, arguing that 80% of people recognized the brand without an explicit mention of the company.
Closer to the year’s other bookend, during October’s Money20/20 conference in Las Vegas, the payment giant blitzed the airport baggage claim area with a dozen or more digital billboards to drive home a simple point: "Vegas, our game goes beyond cards."
The company’s pivot away from its five-decade bread and butter conveys that the world’s second-leading payment network has taken cards as far as they can go. And that the future lies in the network it has built, not the payment vehicle.
"Nobody else can integrate the way we can," Jess Turner, Mastercard's executive vice president of products and innovation, told Banking Dive at Money20/20.
"We can enable the entirety of the ecosystem," said Deborah Barta, senior vice president of innovation and startup engagement at Mastercard Labs.
With a network available in 210 countries, Mastercard's reach surpasses even that of market leader Visa. The two networks support an equal number of merchants (about 44 million apiece), but nearly a billion more cards (3.3 billion vs. 2.4 billion) bear the Visa logo.
Be that as it may, Mastercard is starting to see returns on its beyond-cards strategy. The payment network saw a 33% increase in the "other" revenue line on its third-quarter earnings statement, which the company attributed to a strong showing in data and cyber intelligence. Mastercard's revenue jumped 12.6% year-over-year to nearly $16.3 billion. But it knows that kind of growth would be difficult to sustain without smart partnerships.
These alliances can stem from a need in the marketplace, a vote of confidence or a social imperative.
Mastercard made several moves this year to enable or speed up cross-border payments, or to align itself with companies that do. In July, it acquired Transfast, a peer-to-peer (P2P) and business-to-business (B2B) payments company that claims to reach 90% of the world's accounts. Two months later, it partnered with software provider R3 to develop a blockchain-powered platform to hasten B2B cross-border payments.
Not long ago, Mastercard's pushback on cross-border payments proved costly. The European Union fined the company $650 million in January after a six-year investigation determined it forced merchants to only use banks in their home countries when processing payments. Businesses passed the cost on to consumers. Mastercard, which did not contest the penalty, said it stopped that practice long ago.
Today's more solution-focused approach marks a philosophical evolution for Mastercard.
"We're trying to solve for the use cases that need solving with partnerships," Turner told Banking Dive. "You want to solve for the consumer."
Sometimes that means solving for businesses, too. Mastercard announced a partnership in October with food supply chain company Envisible that will let shoppers learn about the sourcing of their seafood when they scan it using a mobile app.
The payment network is also testing, with PNC Bank, a system that will let businesses pay suppliers in real time upon delivery of goods or services. The aim is to cut down on the paperwork in industries such as alcohol distribution that have complex supply chains and a settlement process driven by cash and checks.
Returning to cards, Citi in June began using Mastercard's technology to let its U.S. credit-card holders redeem their rewards points instantly. That aligns with customers' expectation to do business at the speed of social media. "We're moving from points to … creating emotional experiences," Kirsty Rankin, Mastercard's senior vice president of product development for data and services, said in a panel discussion at Money20/20. "If [customers are] giving you data, they're expecting something back."
The company has kept its eye on inclusion, too. Mastercard is enabling its issuers to use a feature that lets transgender customers use their chosen names on credit and debit cards without requiring a legal name change.
In other partnerships, Mastercard has acted as a phantom benefactor. Zach Perret, CEO of the fintech Plaid, revealed in a September blog post that Mastercard and Visa invested last year in his company's Series C round.
Perret left vague the ways its business would be influenced by the payment card giants, saying Plaid would "work with Mastercard and Visa at the intersection of payments and data access."
The payment network and its closest competitor aren't always so chummy. Both Mastercard and Visa are partnering with challenger bank Revolut. The startup will use Mastercard when it rolls out payment cards in the U.S. this year. But Visa said in September that it will be the network Revolut uses to broach 24 new markets worldwide.
Mastercard's highest-profile partnership of the year sees the company returning to its card roots — but with breakthrough technology. For Apple Card, which launched in August, Mastercard helped develop tokenized credentials that replace the 16 digits etched on the front of a card and the three-digit code on the back.
"We're taking the digital representation of that number and scrambling [it] into a code that only we and Goldman Sachs can recognize," Craig Vosburg, president of North American operations for Mastercard, told CNBC.
Security is the aim. And Chris Reid, Mastercard's executive vice president of cyber intelligence and data services for North America, said in May any bank wanting to launch a card on that platform could do so in six months.
"We know consumers are looking for something that is digitally oriented, that is enabling them to live their digital lives in a way that they would like to, that carries some spontaneity ... and so that's why we have introduced this: digital first, physical optional," he said, according to American Banker.
Matters of trust
Mastercard generated some of its biggest headlines of the year because of a partnership that didn't materialize. The company in October backed out of the Libra Association, a group of 28 supporters of a Facebook-led initiative to develop a digital currency. Lawmakers in the U.S. and abroad questioned Libra's anti-money laundering safeguards. Mastercard's departure, alongside those of Visa, Stripe and PayPal, left the crypto project without any payments companies among its partners.
Asked at the Money20/20 conference if the exodus bothered him, David Marcus, the head of the Libra project, said, "The difference between the [Libra Association's] 28 [original backers] and the 21 [current members] is, the 21 know what they're getting into."
A Mastercard spokesperson gave no reason for the exit, telling The Wall Street Journal "there are potential benefits in such initiatives and [we] will continue to monitor the Libra effort." But consumers' trust in Facebook has suffered over data privacy concerns following the 2016 Cambridge Analytica scandal. And Mastercard has espoused that trust is crucial. In some cases, Barta said, the company puts itself in position to "establish trust amongst players that may not trust each other."
In what may become its most impactful venture of the year, the company is seeking a role as standard-bearer. Mastercard in October laid out data responsibility principles, and it wants to recruit partners to advance a dialogue on the ownership and protection of information.
JoAnn Stonier, Mastercard's chief data officer, said the principles stem from a lack of guidance on how data should be used amid continuing innovation.
Consumers should own, control and benefit from their data, and companies should protect it, a Mastercard white paper said.
"Because of the nature of ... data sharing, having a set of common principles and practices becomes really appealing, especially if you're the individual who's trying to navigate all of this," Stonier told American Banker. "It used to be that you would walk into a bank branch and get to know your banker, and that's not something we're doing much anymore. How do you incorporate that kind of trust in a digital age?"