Master of all cards

Mastercard’s transformational role in finance

Every year, the respected  BrandZ Top 100 Most Valuable Global Brand List allows us to review how the world’s most popular brands are faring with consumers. Amazon topped the list for 2019, having invested in its services and offering to deliver a truly unique customer experience, but one of the most interesting brands on this year’s list was Mastercard. The brand ranked #12 across all categories, enjoying a 30% year-on-year increase in value and pushing towards the global top ten. Building on its strong, 50-year heritage, Mastercard has developed a rich agility and stayed hyper-relevant across the globe.

Technology has redefined the finance category across the board, leading to higher consumer expectations and to challenge banks that claim to meet those needs. Given the accelerated pace and progression of life and business in the last decade alone, it wouldn’t have been surprising had a heritage brand like Mastercard been disrupted. FITCH data shows, however, that Mastercard has been a significant agent of change, making it a true success story – both as a brand in people’s lives and a provider of market-leading financial services.

A symbol of financial security and freedom

You may have noticed the press coverage when Mastercard dropped its brand name from its famous yellow and orange disc logo and created a melody to accompany its marker instead.

Marketing mogul Mark Ritson’s point that "all brands have codes: graphical and symbolic devices that are associated with the company or product", is true. The application of these codes should be spread throughout the marketing mix constantly to establish a recognisable identity that resonates with people. For over five decades, Mastercard had done just that, and so it was in a great position to make such a bold move.

Being powerful enough to drop your brand name speaks volumes about how valuable your brand is. It is indicative of where you sit within market culture and in people’s estimations.

Using FITCH’s own data model, we codify what customers expect from the experiences that brands offer. Powered by the wealth of BrandZ data, our methodology maps those expectations against four basic human instincts: progress, comfort, belonging and independence. When a brand positions its products and services specifically in response to one or more of the basic instincts, we know it’s on the home stretch to success.

Data for Mastercard suggests its consumers have come to associate the brand with comfort and independence. Essentially, this means consumers feel reassured and in control with regards to the Mastercard brand; the brand encourages them to carve their own identity and helps them to learn. Contextualised, it makes complete sense: payment security and financial freedom are two huge factors that affect our daily lives – especially buying and purchasing at our current rate.

Innovations in the category

Amid the chaotic buzz of modern life, brands need to stand out and to give consumers something deeper than convenience or a fancy product in order to stay front of mind.

The payment sector is a tough one in this respect. As in many areas of finance, it can be difficult to translate a brand’s USP or capabilities across the public sphere. It can be even more challenging to identify what instincts a brand may tap into and build on, especially given the entire industry’s rate of acceleration in just one generation. Amid other factors, technology has redefined and recharged the sector completely – from the first online transactions, to contactless payments becoming available almost everywhere.

New technologies have had a positive effect on people’s view of payment brands in the category overall. Innovation has helped consumers to adapt and celebrate new ways of going about their lives, and Mastercard has been a significant driver of this change. The brand’s innovations provided customers with new opportunities and ambitions to live better. The “Priceless” moments from Mastercards long-running ad campaign were successfully translated into a modern set of significant payment experiences in our omnichannel world, which has no doubt contributed to the brand’s ranking in this year’s BrandZ list.

The convenience mindset

Strategic partnerships and communications have been hugely influential in building success and remaining relevant. Mastercard has ensured its brand takes advantage of trending changes in consumer behaviour and wider market activity and that is clearly reflected – and rewarded – by the fact that Mastercard is the partner of choice for more than 60 digitised banks across Europe.

Why? Quite simply, because it owns this deep understanding, and has a proven track record of innovating to adapt to changing behaviours.

Currently, 84% of Europeans pursue digital banking regularly; 63% use mobile banking apps from traditional banks; 20% from digital-only banks, and almost two thirds expect the demand for digital banking solutions to increase in the future. Convenience remains the biggest advantage of digital banking solutions at a time when Europeans more than ever cite security as the most significant criteria for using digital banking solutions (67%).

This convenience mindset translates into the new technologies and partnerships that Mastercard embraces, as it creates breakthrough services and experiences.

Seamless and secure biometric payment is an area that Mastercard’s chief of security has publicly prioritised for a long time, stating that biometric payment not only makes transactions safer but dramatically speeds up digital checkout time and reduces cart abandonment rates – and this is crucial for retaining its array of partner merchants. The brand is future-proofing which, in turn, boosts the smoothness of the payment experience for users.

Intelligent technological solutions

To this end, frictionless transactions are being further enhanced by Mastercard’s focus on human-first conversational commerce. Drive-throughs that we all know and use account for 70% of quick service restaurant transactions, and yet the experience has remained basic and unexciting. As customer expectations increased, Mastercard partnered with ZIVELO to bring a transformative element to the journey, not merely to meet but also to exceed those expectations. Consumers will be able to order from an AI-powered ordering assistant integrated with a dynamic menu display. The menu will automatically update using a proprietary AI solution developed by Mastercard to produce a display that may be customised either for a specific customer, or according to geo-specific details such as location or weather.

This brand-new concept for a typical and popular customer journey is a stellar example of everything Mastercard does right.

Smart approach to devices

Mastercard has dedicated intense focus and investment to ensure it is a leading provider on pretty much all devices. Mastercard’s partnership with Fit Pay highlights the growing ecosystem of technology integrators that have joined its Commerce for Every Device programme. Mastercard wants to enable simple payment transactions that can fit every consumer lifestyle and – most importantly – with the highest level of security.

Mastercard doesn’t just rise to the demand from device brands for payment capabilities, it embraces the demand and runs with it to achieve successes beyond the original projection.

The ability to enable so many devices with payments is an extension of the Mastercard Digital Enablement Service (MDES) and the Digital Enablement Express (Express) programme. Through MDES and Express, any accessory, wearable or device can be payment-enabled to be used at over 6 million Mastercard contactless-enabled merchant locations in 77 countries across the globe. Because these device-based transactions are tokenised through MDES, consumers have peace of mind, knowing they are protected from fraudulent transactions when using their favourite devices to pay.

What’s next for Mastercard?

All of these innovations are transforming the way customers interact with Mastercard day in and day out. The brand is moving beyond being simply a transaction provider to running within ecosystems and becoming an instrumental part of people’s lifestyles.

Looking to the future, what challenges are on the horizon?

At the moment, the card payments arena usually involves the middlemen taking a cut. Digital systems, like those used in China and Kenya, could threaten banks and other players. Challengers like Alipay, WeChat and M-Pesa represent different strategies for slicing up the card operators’ pie – but that’s another story altogether.

In the West, platforms like Google, Apple or Facebook have their own ‘Pay’ products that link consumers directly to merchants. While the providers do use Mastercard, it is a whole other story –especially in light of recent news from Facebook around its plans to launch cryptocurrency Libra in 2020. How Mastercard develops its partnerships with banks like Monzo and Starling will be another interesting area to watch, especially with the digital-only banks foraying into the serious world of financial services.

As a brand, Mastercard has successfully developed into one that resonates well within the consumer imagination, shaping itself across a whole range of sectors and cultures. To remain relevant and powerful it needs to continue developing intelligent technology that provides value to partners and, crucially, tallies with consumer expectations on experience. It’s already on a quick ascent to the top 10, so it’s all eyes on what the brand will do next to get there.