- Mastercard just promoted its new chief product officer, Craig Vosburg.
- Vosburg will bring engineering and product teams together under one organization.
- The move is, in part, to help Mastercard keep up with the rapidly changing world of digital payments.
- Vosburg will also oversee Finicity, the data aggregator Mastercard acquired for $825 million earlier this year.
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Mastercard is best known to consumers as the symbol on their credit and debit cards, and for processing card transactions globally. But it's spent the past few decades working on becoming much more than a card-payment processor.
To that end, it's just joined its engineering and product teams under the leadership of a new chief product officer, Craig Vosburg. He'll oversee thousands of employees who work on user-focused design, and will be tasked with driving growth in new areas for Mastercard, including non-card payments, open banking initiatives, and Mastercard Labs, the company's R&D arm.
"If you think about the company from its earliest beginnings more than 50 years ago, we appeared on the scene as effectively a card company that was enabling consumer credit transactions," Vosburg told Insider.
But the company has added new use cases, including business and commercial payments. And it's also expanded the payment types it supports to include real-time payments, peer-to-peer, and blockchain-enabled transactions.
On top of these various payments "rails," Mastercard has added things like data-sharing services and fraud monitoring, leveraging the wealth of data it already has from its business and consumer end users.
"We've evolved who we think of as our customer to be not just the bank and their consumer, but merchants, governments, digital players, fintechs, and companies large and small," Vosburg said.
It's all a part of Mastercard's strategy to be involved in any and every payment flow, globally, which has meant a full evolution of its bread-and-butter business. Rival processor Visa, too, is vocal about its ambitions beyond cards, looking to become what it calls a "network of networks."
Read more: POWER PLAYERS: These are the 15 execs at Mastercard leading the card giant's strategies in new businesses focused on cybersecurity, data, and analytics
Mastercard's goals in combining engineering and product are twofold. One is to get closer to its customers and understand where it should invest in its platform. The second is to help Mastercard meet evolving customer needs more nimbly and more efficiently, Vosburg said.
"The closer we bring the technology and the product capabilities to the market and to our partners and customers, the more effectively we think we'll be able to serve them with the kinds of speed and adaptability that the market today requires," Vosburg said.
Vosburg, formerly head of North America at Mastercard, is CPO effective January. He'll be succeeded by Linda Kirkpatrick, a long-time exec at Mastercard who currently oversees Mastercard's US issuer business.
Vosburg is laser-focused on uniting Mastercard's entire payments stack
In a year where consumers and merchants by necessity moved online, the long-standing trend toward digital payments and cash displacement accelerated. Shifts that experts expected to happen over the next several years have happened in a matter of months. And keeping up with the growth in new digital payments has informed much of Mastercard and other payments players' product strategies.
"The events of 2020 have served to both validate the path we were on as far as our strategic priorities and accelerate the need for us to execute against that path," Vosburg said.
As consumers increasingly pay using more than just cards and cash, players like Mastercard have no choice but to build out their processing capabilities to support things like account-to-account payments and buy now, pay later transactions.
To be sure, many consumer use cases still default to card-based payments, which includes contactless options like digital wallets. But Mastercard sees a big opportunity to use its non-card payment capabilities to grow its business customer base, especially when it comes to companies paying each other quickly and keeping tabs on their accounts.
"A lot of the early opportunities that we're targeting with those capabilities focus on the B2B space, which is one we're particularly excited about," Vosburg said. "Non-card rails, we think, bring a lot of value to B2B payments, particularly accounts payables for corporates."
For businesses, speed and accuracy of money movement through automation is crucial to keeping costs low. To that end, Mastercard is building out more tools for businesses in addition to processing payments.
"These are all things where real-time payments, fast ACH, blockchain, and account-to-account can all play a role," Vosburg said. "That's an area that we're targeting for development of applications to go after those use cases."
And Vosburg envisions growth in this area over a period of decades.
"It'll be a decades-long journey, as the consumer cards journey has been a decades-long one starting more than 50 years ago," Vosburg said.
With its Finicity deal closed, data is now a big focus for Mastercard
As consumers' financial lives are increasingly fragmented across various banks and apps, financial data has become top-of-mind for all players. Fintechs need access to financial data, which is usually stored in banks. Sitting between fintechs and banks are data aggregators like Finicity, Plaid, and Yodlee, which provide the data pipes.
With the proliferation of digital finance, open banking and open finance have become top-of-mind for all players in the market, Mastercard included. Open banking refers to access to bank data like account numbers and balances. Open finance is broader, including more pieces of consumers' financial lives such as payroll, insurance, credit cards, and investments.
In November, Mastercard closed its $825 million acquisition Finicity. Visa announced plans to acquire Plaid in January, but the deal has since been halted by the DOJ, which says Visa's deal was an attempt to squash a competitor.
Read more: We talked to Mastercard's incoming CEO about why the card giant is spending $825 million to buy financial-data startup Finicity and how it compares to the Visa-Plaid deal
"I see open banking as something that is certainly taking on greater importance," Vosburg said.
In Europe, it's largely been regulators driving open banking standards, whereas in the US, data sharing standards are being set more so in the private sector.
"Interestingly, because I think it's been driven by market dynamics, you see a variation in approaches," Vosburg said. "It's early stage. It's a very competitive and dynamic field."
Currently, aggregators like Plaid and Yodlee are standing up separate data-sharing agreements with the country's largest banks, and the terms of each agreement vary. Then there's Akoya, a newer aggregator in the space backed by the banks themselves that's looking to offer a single data connection across the banks it signs on to its platform. US Bank was the first to sign on to Akoya's platform in November.
Industry-wide groups like FDX, for example, are setting technical standards for data management via APIs. The CFPB announced plans to issue rules on data sharing agreements, requesting input from all players in the industry through the beginning of next year.
Now, with Finicity, Mastercard will have a larger part to play in those discussions.
Read more: Execs from Plaid and Yodlee explain how new data-sharing rules will dictate the future of how banks and fintechs work together
"We see great promise and value for Mastercard in playing a role in that space, in part because it's a space that would benefit from having a trusted intermediary in helping to facilitate flows of data in the right way," Vosburg said.
Fintechs also need partnerships with processors like Mastercard if they want to offer card products. And Mastercard has doubled down on its fintech outreach, creating a new team earlier this year to manage the relationships with up-and-coming digital players. In 2020, Mastercard won over fintechs like Brex, Dave, and SoFi, from Visa.
Learn more about the financial services industry.
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