Mastercard Talks About Trends and Views on Mobility and Electronic Payments

The world is moving toward a cashless society, and companies working on electronic payments are starting to recognize this new source of revenue by partnering with mobility services. Mastercard, in particular, has been working with whole cities to enhance transportation through open-loop payment systems.

“There is real significant momentum for open-loop payments,” Ian Slater, senior vice president of enterprise partnerships for Mastercard, told Mobility Finance.

In an open-loop transit system, a traveler can use their credit, debit or prepaid card they already carry with them – they don’t need to buy an extra ticket or smart card that only works in a particular city. The underlying drive toward this payment system comes from both consumers and cities, as people understand that electronic payment removes the hassle of paying with cash while cities understand they can reduce operational costs and that passengers paying with cash slow down the efficiency of public transit, Slater said.

“We have pioneered an approach of working directly with cities… but the approach we take is working with the city as a partner,” he said, adding, “We on our own cannot complete an end-to-end holistic solution to what a city needs for mobility… But we can say we work in conjunction with other companies that can help with an end-to-end solution.”

Some of these mobility partnerships include General Motors Co., Uber, and Lyft. With GM, Mastercard has a co-branded card that allows for online payments for multiple services — including Maven carsharing. With Uber and Lyft, Mastercard helps drivers get paid faster, a spokesperson previously told Mobility Finance. 

There is another trend within mobility and electronic payments, involving data, Slater said.

“Once a city has reached that level of sophistication what do they do next? Cities are also saying, ‘how can we better leverage data?'” he said.

That data includes macro-level information such as where people are traveling from, where they are traveling to, and when they are traveling and what modes of transportation they are using. By understanding this, public transit can better adjust to the needs of travelers, as well as the different types of travelers. For instance, tourists and residents have differing priorities in regards to travel. A tourist may want to visit popular attractions, while residents are traveling primarily to and from work instead of sightseeing. But cities treat all passengers the same, which means some travelers are underserved.

“This leveraging of data is going to be a key trend over the next couple of years,” Slater said.

This concept of demand management is something Mastercard will heavily explore in the next 12-18 months he said and is something currently experimented with in Chicago. But demand management is more than just finding trends in data about where and when people travel, but also about engaging with travelers to use other forms of transportation. For instance, no customer wants to be informed that their train is down and that they have to take another form of transit and purchase a separate ticket, Slater said. A company like Mastercard, by offering seamless payment solutions for multiple mobility options, can help ameliorate that friction.

That friction also exists outside of public transit, but to an individual’s personal mobility as well.

“A place where we want to get to is to provide an integrative experience around a total journey. People’s journeys are fragmented,” Slater said. A person could go to a travel agent and have a vacation planned out and pay for it, but there are still payment gaps — such as transportation to an airport, or during the vacation — that can be filled by Mastercard and partners.

“We are just starting to have conversations with people [talking] about ‘how we do offer that integrative experience?’…[But] we can’t provide it on our own, we have to do it with partnerships,” he said.

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