May 23, 2022

Corporate perspective: interview with Mastercard

Since 2019 Italian Angels for Growth, Italy's largest group of professional business angels, has opened its doors to domestic and international companies interested in researching and promoting innovation.

The goal is to foster cooperation between different players in the innovation ecosystem, offering companies services to support their open innovation activities, visibility on new technologies in development and opportunities for collaboration with innovative startups, innovation centers and academia.

Let's find out more together with Mastercard, IAG Corporate Partner since the early days, which has created a strategic partnership with angels, finding the added value of IAG's scouting activity of more than 6,000 startups and expanding its business opportunities through collaboration with selected innovative companies.

We talk about this with Michele Centemero, Country Manager Italy at Mastercard.

The 2021 edition of the Women & Sustainability Innovation Cup, promoted by IAG in partnership with Mastercard, involved more than 70 startup candidates and managers and C-levels from Mastercard who personally contributed to the selection of the startups, and ended with the awarding of the winner within the framework of Connext2021, a major event for all players in the business world. What impact can these opportunities for visibility and collaboration with big players like Mastercard have on the startup landscape?

The first edition of the Women & Sustainability Innovation Cup, presented by IAG in partnership with Mastercard, was a success of which we are very proud. This award represents a prestigious showcase that rests its foundation on two values and goals that have always been fundamental for us: inclusion and diversity, and the identification and enhancement of talent. Although, in fact, women have been one of the categories most affected by the pandemic, as highlighted by our observers on the subject, with 87 percent of female entrepreneurs experiencing a negative impact on their business, the crisis and the situation of uncertainty has highlighted the strong entrepreneurial spirit of women, which has also been confirmed in this award aimed specifically at female-dominated teams.

Stages like the Women & Sustainability Innovation Cup are part of the broader range of initiatives that Mastercard promotes to support start-ups both through targeted programs and through investments in ideas and projects that the company considers particularly promising. It is a great honor for us to be able to flank and support through the sharing of our expertise promising realities such as the winner Mirta and the numerous startups that have applied, which have demonstrated that they care about the development of a better, fairer and more sustainable society. On this occasion, Mastercard made available to the winning startup, which stood out for its strong ESG (Environmental, Social and Governance) component, the valuable opportunity to access and benefit from mentoring and potential business synergies, with the aim of supporting its growth and helping it realize its potential.
Our ambitious global goal is to include one billion people in the digital economy by 2025, along with 50 million micro and small businesses and 25 million women entrepreneurs worldwide. And we are constantly striving to achieve it by implementing even at the local level projects in line with sustainable development, inside and outside the company.

Mastercard is an international technology company that operates in the payments industry with the goal of creating connections and promoting a digital economy from which everyone can benefit, wherever they are, through secure, simple, fast, and accessible transactions. How and when did you approach the startup world and what prompted you to act to support innovative new players?

The face of commerce is changing early adopting in the tech sector has indeed generated exponential growth in the touchpoints and sales of the retail world and the convergence of the physical and digital worlds. With technology increasingly present in every aspect of our daily lives, consumers expect experiences that are increasingly personalized to their needs and wants, as well as bonding with brands that share their causes and values.

Therefore, the process of co-creation with fintech realities becomes critical to getting closer and closer to consumers and driving their brand preference. As Mastercard, we have become a privileged parter of 97 percent of the top brands in the fintech world in Europe and North America, and we have done so much work in recent years on opening collaborations in our ecosystem by connecting thousands of startups with the banking and retail world and enabling many companies to grow their business.

Startups represent an inexhaustible source of innovation for our industry, and we believe that in a logic of open innovation it is a great asset to be able to work alongside and support them by sharing our expertise and network and, in some cases, even investing in them directly. Therefore, Mastercard makes digital services and dedicated projects available to startups, helping those operating in the fintech sector to raise the quality of their services, create connections with technology partners, and find valuable solutions and new opportunities to innovate their business.

Mastercard has activated multiple programs to support startups in recent years, including Early Stage, designed for the needs of startups that do not yet have a well-defined business model. Early Stage is currently active only in the US, while in Europe Mastercard has preferred to focus with Accelerate on companies that have already taken their first steps, validated their ideas and are in the scale-up phase. Can you tell us more about this?

Mastercard has activated multiple programs to support startups, including Early Stage, designed for the needs of startups that do not yet have a well-defined business model. Early Stage, a program within the broader Start Path project, is currently active only in the U.S. While in Europe Mastercard has preferred to focus with Accelerate on companies that have already taken their first steps, validated their ideas and are in the scale-up phase.
Accelerate enables fintechs to be able to partner with our company in just a few weeks while gaining countless benefits through our expertise and a suite of award-winning services that help participants benefit from the opportunities offered by the ecosystem, customers, and innovations. First and foremost, Mastercard provides a customized set of world-class rules, resources and services designed to enable program startups and fintech expansion. Through Accelerate, a developer can also gain access to our APIs and payment, security and analytics services through an intuitive procedure that enables the construction of the best programming languages.

In addition, the program allows fintechs to connect with thousands of Mastercard's technology partners, and financial institutions can look to us to see which companies are the right fit for a specific job or need; it is up to us to introduce fintechs through our network of relationships among financial institutions to both accelerate the growth of the individual fintech and to meet the needs of the banking institution.

For years Mastercard has been committed to enhancing and supporting innovative realities, for example through the international Mastercard Start Path program, which supports fintech startups in the scale-up phase. Can you tell us more about how Start Path works and how Mastercard Italy facilitates its connection with the innovation ecosystem?

Mastercard has a long experience in innovating together with startups. Since its inception in 2014, through the Start Path program we have provided mentorship, support, and access to more than 260 startups that have participated in this program and obtained more than +$5B in investments.

The young companies we are working with by joining have had access to resources, expertise, technology solutions, and most importantly a substantial network of our partners. Mastercard gives them access to its technologies on payments, blockchain, cybersecurity, and most importantly customers. Added to these is training through direct consulting: those who participate in Start Path, in fact, have access to a six-month program that provides them with step-by-step guidance, as well as access to our technologies, but most importantly it is targeted to our customers, to give them visibility. In short, the goal is to create the right connections between investors and startups so that the former can intercept new valuable ideas and the latter can sign new contracts, and thus grow and evolve.

Mastercard creates a springboard for fintech companies that are driving a more inclusive digital economy and helps them accelerate the way they conduct their business. Areas we favor include open banking, predictive financial models for small businesses, smart payments, and beyond.

In summary, our program brings together diverse networks of innovators who are working to accelerate change. Among the startups selected over the past year internationally are fintechs using gamification, behavioral science, social banking platforms, and the more advanced areas of payments. And within this program thanks in part to a special project we want to extend opportunities for those who are underrepresented in the fintech world.

In some cases, Mastercard invests directly in the projects it considers most promising. A few examples?

In our work with startups and fintechs, we have identified some important trends that will have a major impact in the coming years in our market as well, and in these strategic areas we are identifying innovative fintechs.

Some of the most interesting areas include BuyNowPayLater, an area that continues to be very relevant and growing worldwide, and Open Banking. The latter, which came to Europe thanks to PSD2 legislation, has already been adopted in other parts of the world beyond the regulatory aspects. In Europe, the focus on Open Banking is changing: the question, from "how can we adapt at the regulatory level," has become "how can we monetize open banking services.

We also look very carefully at the migration of core banking systems to the cloud. With the advent of digital banking, the cloud, and APIs, a significant shift is taking place in the way products and partnerships are designed, with the constant demand that financial transactions be processed in real time, that partnerships be entered into within weeks, that new features be constantly released, and that there be scalability of one's infrastructure as required.
Modern core banking platforms provide for configurable, scalable, and reliable models based on the micro-services architecture and are destined to become "core enablers" of this structural change.

Finally, we are very interesting to the area of subscription management. Consumers want to understand how recurring payments work and eliminate any unnecessary spending where possible. In retail, consumers have an average of 8 to 11 subscription subscriptions (and they continue to grow). The new fintechs in the industry offer models that enable financial institutions to provide consumers with an up-to-date statement of all their recurring payments, giving them the immediate ability, quickly and easily, to cancel those they no longer need.

Over the years we have also invested in several promising and talented entities in whose ideas and values we authentically believe and recognize ourselves. There are many different value stories that we have helped build internationally.

From the partnership with the Swedish fintech Doconomy for example, a very important project in sustainability was born, the Mastercard Carbon Calculator. This tool, integrated within Mastercard's global network allows banks to customize sustainable spending patterns based on consumer needs. The new tool makes information and data on the impact of one's consumption easily accessible, making consumers more aware.

Another example is the project we did with SnapSwap, which has been part of the Start Path program since 2018, and in 2020 launched, in partnership with Mastercard, an online platform for business payments and spend management. The goal of the project is to help companies improve their efficiency by saving time and achieving a higher degree of flexibility and control over payment flows.

Finally, I would like to mention our project with Railsbank, a global Banking-as-a-Service (Baas) platform, which is among the first to take part as a partner in the Fintech Express program. Since joining Mastercard's award-winning Start Path program in 2017, Mastercard's fruitful collaboration with Railsbank has further promoted the digital economy by enabling the fintech world to bring new technologies to market quickly and easily.