Next Generation

Payments
 LAA
LS
AAS

Factors triggering disruption in the industry

TRENDS IMPLICATIONS FOR BUSINESS

New Payments Architecture (NPA) Government and industry associations

Modernization of
payments infrastructure New Umbrella Entity (NUE) need help designing new payments
systems

Digitization of commerce Winning requires providing the best experience

Re-inventing of banking Digital players driving growth; Traditional

customers need help innovating

Proliferation of data Opportunity to use data for good and

Confidential / Internal Use Only

Data Analytics

©2021 Mastercard. Proprietary and Confidential

Open Banking Artificial Intelligence for profit. Building and maintaining trust
is paramount

Increase in cyber crime • Digital fraud rate is 4x physical1 Increase in cyber crime
• 50bn connected devices by 20302
• 30%increase in cybercrime in 20203

2
 LAA
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A NEW FUTURE

The convergence of
technologies, connectivity
and data is enabling the
next wave of payments
Changing our approach to customer
interactions accelerating and embedding
technology.

The combination of 5G, Computing

power connectivity and data will change
the way we interact, opening the doors

©2021 Mastercard. Proprietary and Confidential

Confidential / Internal Use Only
to endless opportunities and new
journeys.

3
 A NEW FUTURE

Bringing a new Payment Evolution 4X Payments

Pandemic More Players
Embedded and Invisible Payments Lead with experience Payments are defined by
EXPERIENCE
Payments are embedded and
invisible and enabling function to
provide immersive, seamless and
frictionless customer experience

Combination of payments (4x) leads to

a new set of capabilities and opportunities
1 2 3 4 Network Effects Data Efficiency

Experience become
more significant Embedded
Finance

©©20202121 MMaasstteerrccaarrdd. PPrroopprrieiettaarryy aandnd

Platform
Capabilitie 4X Data
Pay Fast Pay Easy Pay Invisible Pay s
Payments

ConConffiiddeentntiaiall
Payments personalized Dawn of PSD2 / Open Payments become a Traditional payments
through partnerships, Banking and emergence focus area for firms to are considered a non
players invest in of new capabilities made differentiate through differentiated function,
innovation to payments easy as technology investment with a mix of in-house Shared
differentiate transaction data gained and partnerships and outsourced Infrastruc
ture
focus
Cost Reduction Monetization
4
 LAA
LS A A
OPEN BANKING S

Open Banking emerged from an unexpected

source
Fintechs
Increased
EU-wide
customer
choice

Easier for new

market entrants

Improved security
and transparency
Banking Disruption

Confidential / Internal Use Only

©2021 Mastercard. Proprietary and Confidential
UK-led
Open Banking

Consumer
behavior

5
 LAA
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OPEN BANKING

Open Banking is now a global phenomenon, and markets are reacting differently
NON-EXHAUSTIVE
AS OF JANUARY 2021
GLOBAL OPEN BANKING REGIMES
MEA
Norway Russia
Regulatory driven
Canada
UK South
Germany Ukraine Korea
Kazakhstan
France
Open Banking through regulator- U.S. Turkey
Spain Italy
endorsed standards, e.g. for China Japan
Israel UAE Pakistan
account information and/or Bahrain
payment initiation Saudi Arabia India Hong Kong
Mexico Taiwan
Colombia Malaysia Phili
Costa Rica Sri Lanka ppines
Nigeria Singapore Indonesia
Kenya
Brazil
Industry driven Peru
Australia

Confidential / Internal Use Only

©2021 Mastercard. Proprietary and Confidential
Open Banking through bilateral Chile South Africa
Argentina New Zealand
and/or voluntary industry
associations and standards for
competitive differentiation
Industry driven Regulatory driven Countries with less significant
Open Banking development

12 6
©2021 Mastercard. Proprietary and Confidential
 LAA
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BANK AS A
SERVICE

Out of this ecosystem…

Bank as a service emerged
The concept of Bank as a Service has been
a natural evolution of digital adoption and
transformations, building on the platform
business models of other industries.

For the first time banks could either offer

their services to other organizations or even
consume them, to accelerate their

©2021 Mastercard. Proprietary and Confidential

Confidential / Internal Use Only
propositions and operational services.

8
 LAA
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A NEW FUTURE

5G and Edge Computing will bring

payments closer to the consumer
The growth of 5g and computing will allow for
data to be processed by the device itself or by
a local computer or server, rather than being
transmitted to a data centre

Devices such as fridges will automatically order

and pay for produce that is running low,
creating new customer journeys and
experiences.

Confidential / Internal Use Only

©2021 Mastercard. Proprietary and Confidential
Samsung and various technology companies are
already creating these experiences in readiness
for a market that is expected to reach $125.7
billion by 2025.

9
 LAA
S
A NEW FUTURE
1 2

Scan & Bag Shop with ease

Bag as you shop Shop with less contact by
with your reusable scanning & paying from the
bags. cart.

3 4

SmartCart
Introducing a new and Stay on budget Checkout
innovative way to shop with a See your running order total Enjoy faster checkout and
built-in scale and camera, as you shop to help stay be on your way quickly.
within budget.
providing an easier shopping
experience with less contact and
faster checkout.
Let’s take this innovation even further…

Confidential / Internal Use Only

©2021 Mastercard. Proprietary and Confidential
Household Inventory
management Management Social loyalty
Adds item to list Checks stocks in store Share loyalty points and
based on fridge and orders more if coupon with friends &
levels needed family
10
 LAA
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A NEW FUTURE

Unmanned stores are changing the way we think about in person payment

High Volume Grab & Go Order Ahead and Express Format

High Density Micro Market Grab & Go Hub Everyday Store
Use Cases

Frictionless retail experiences Extending convenience store to Integrating order pick-up with Frictionless retail at office
with high traffic at peak times fuel pump, outdoor or indoor grab & go experience to residential, or university
including stadium environments spaces as a way to drive enable the next generation of locations for brands to meet
or transit hubs. higher conversion of grocery stores. the consumers where they
merchandise sales. are.

Confidential / Internal Use Only

©2021 Mastercard. Proprietary and Confidential
Smaller store formats, with Vending machine style format Providing blended consumer Unattended store format for
Solution

selective merchandises mix to with curated merchandise experience with store acting as everyday needs configurable to
handle high volume traffic based on key convenience a fulfillment hub as well as be incorporated within existing
during condensed time purchases. shopping destination. real-estate locations.
periods.

11
 LAA
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A NEW FUTURE

The Car is
becoming a digital
platform
The autonomous vehicle market will grow from
$54.23 billion in 2019 to $556.67 billion in
2026, according to Allied Market Research
estimates.

The car itself will start to become another IoT sensor:

a spoke at the centre of the vehicle ecosystem,
collecting, sharing data and initiating payments.

Confidential / Internal Use Only

©2021 Mastercard. Proprietary and Confidential
12
A NEW FUTURE

The growth of IOT and the use

of payments is expected to
grow by 2025 across all
devices
$2.9 Billion Transactions made by a
payment enabled TV
Global

$4.2 Billion In-vehicle payments

Global

©2021 Mastercard. Proprietary and Confidential

$4.5 Billion Transactions made by voice assistants
Global

$242 Million Global Transactions made by Commercial

vehicles
A NEW FUTURE

The receipt is no
longer just proof of
purchase
Embedding new experiences in the context
of the digital receipt would boost the value
proposition of merchants.

Turning the receipt into an engagement

tool, whilst saving money on paper and
benefiting the environment.

©2018 Mastercard. Proprietary and Confidential

Confidential / Internal Use Only
A NEW FUTURE

Sustainable Payments

Users care about sustainability. Choosing to

understand, offset and action a carbon-zero
lifestyle.

Banks and payment engines are integrating with new

carbon FinTechs. To enable carbon footprint
calculation based on open banking.

©2021 Mastercard. Proprietary and Confidential

 LAA
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A NEW FUTURE

Livestream brings the store to

you, giving real time engagement
with influencers
Livestreaming will bridge online and offline experiences

Unlike a typical 2D shopping experience live stream

shopping, allows shoppers to view the products in
more dimensions and interact with influencers real
time

Confidential / Internal Use Only

©2021 Mastercard. Proprietary and Confidential
In video payments, provides an immersive
experience where shoppers will be able to purchase
in live video, without leaving the experience.

16
49
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A NEW FUTURE

Livestream is now seen as a critical shopping capability,

which has enabled Chinese businesses to continue to grow
pre and throughout COVID.

$60Billion $37 Million ++

Revenue Generated in China A single influencer reached an Covid has doubled audience figures
audience bigger than the Oscars and is expected to grow

Confidential / Internal Use Only

©2021 Mastercard. Proprietary and Confidential
150

7
 LAAS
A NEW FUTURE

This has changed advertising. Ads have lost power. The

creator economy is booming. The line between creator,
influencer, celebrity is blurring.

Confidential / Internal Use Only

©2021 Mastercard. Proprietary and Confidential
 LAA
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A NEW REALITY

How we access money and

new worlds is changing.
VR, AR and XR is the new bridge.

With a predicted revenue of 330 billion and 4.5

billion active users by 2025, is moving us from
a heads-down world to a fully heads-up world.

Confidential / Internal Use Only

©2021 Mastercard. Proprietary and Confidential
These factors, combined with the fact that
VR streaming will be a truly powerful
communication medium.
 A NEW REALITY

VR & AR will start to unlock and blur the

boundaries of digital and physical payments.
S

Confidential / Internal Use Only

LAA

©2021
©2021Mastercard.
Mastercard.Proprietary
Proprietaryand
andConfidential
Confidential
20
 LAAS
A NEW REALITY

TeraZero provides 2-year Metaverse mortgages. Plus

business rentals for events

Confidential / Internal Use Only

©2021 Mastercard. Proprietary and Confidential
21
 LAAS
A NEW REALITY

Purchase NFT shoes with STEPN. Run to earn power

ups. Rent or sell your shoes

Confidential / Internal Use Only

©2021 Mastercard. Proprietary and Confidential
22
 LAAS
A NEW REALITY

Next generation of e-
commerce experience

Confidential / Internal Use Only

Shop NFT Commit Purchase

©2021 Mastercard. Proprietary and Confidential

23
 LAA
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A NEW FUTURE

State of crypto growth is outstripping the internet

1990 - 2000
Internet usage grew
63% each year + EXAMPLE
India gave all access to data
Fastest adoption of technology Internet and mobile Resulting in the biggest use
Internet is huge,
in human history. Following phone allowed for of data in the world, but eventually flattened
that, the mobile phones. networks to be built making internet scale even out over time, due to
faster! more people using it.

No longer linear growth,

it’s now exponential

Confidential / Internal Use Only

©2021 Mastercard. Proprietary and Confidential
1997 2021 Expected that from 2021 onward,
number of crypto users will increase
140 million 140 million crypto users
growing at 113% a year. to
users
Doubling the speed
of the internet 1 billion people by 2024
24
 LAAS
A NEW FUTURE

Tokens and exchanges change the way we engage and pay

We are now in the era

of New Possibilities are emerging
INFLUENCER
the
Crypto is creating communities, creating new forms of
stable coins, and exchanges brings new possibilities
ECONOMY

Confidential / Internal Use Only

©2021 Mastercard. Proprietary and Confidential
Odell Beckham Jr will Invest in your club and be
receive Rams salary in rewarded for performance
Bitcoin
A NEW FUTURE LAAS

Tokens will see the emergence of digital asset managers

We are now in the era

of

INFLUENCER
the
ECONOMY

©2021 Mastercard. Proprietary and Confidential

Confidential / Internal Use
Odell Beckham Jr will Invest in your club and be

Only
receive Rams salary in rewarded for performance
Bitcoin
 All of this is leading us to the Next Version of the
internet
Dapps
Open Creator
Banking Economy
Computing power
DeFi and NFTs
Always on
Real - time personal virtual and
data Web 3
mix reality

5G

All this leads Spatial Metaverse

Technology
to… AI / ML

Decentralized

and Confidential
New payments Governance

Confidential
Digital Twins

Proprietary
Virtual reality

Proprietary and
Wearables &

©2021 Mastercard.
Semantic Web
Interactive commerce Haptics

©2022 Mastercard.
T H E W H O L E E X P E R I E N C E
27
 B E Y O N D B R I N G I N G T H E N E X T L A Y E R O F R E A L I T Y
Metaverse
Fully omnipresent and inmersive services, connectng
Level of disruption for financial

customer´s tangible assets with their visual ones

• Crypto assets custody
• Portable digital assets, digital identity
• Decentralized ecosystems
N E X T • All channels / immersive
Digital Ecosystems • Hyper-personalization
• Human touch
Orchestrate the ecosystem to best
services

serve customers along their

journey • Open banking
• Customer journeys
• Enbedded finance
• Super Apps
T O D A Y • Banking - as-a-
Digital Banking Service
Provide seamless digital
experience
• Mobile banking

©2022 Mastercard. Proprietary and Confidential

• UX / Omnichannel
• Digital onboarding

Y E S T E R D A Y All banking feautres Access to financial Immersive access to all

Online Banking digitally available services anytime, assets (tangible &
Few online banking through the internet anywhere virtual) and financial
services
28 NOVEMBER 10,
2022 Customer experience
 M ICRO PAYM EN TS
GRAN ULAR M EETERI

Ushering in
Powering a new era
Mastercard’s
NG

Pay for internet access, air time, car

of personalised
ability to create and
and
access, insurance

experience-driven
deliver differentiated
paymentsservices and
products,
experiences IN CEN TIVISIN
G/
CO N TEN T O N TH
E
GAM IFICATIO IN TERN ET
Micropayments put the consumer in control, N
Rewarding users for using Pay to read an article , pay by
services or encouraging message sent on social media,
allowing them to pay at a more granular level them to interact pay by viewed video
Across oursingle
(pay by teams, we focus
service unit) on
forthe future
what theyand explore
customer behavior, trends,
actually need (consume) and technologies that unlock
customer value and drive business growth.
IOT devices and M2M payments will also

©2020 Mastercard. Proprietary and Confidential

We do this across
leverage four focus pillars:
micropayment capabilities to deliver
small payments on a more frequent basis, at IOT D EVICES PAYIN
the point of interaction G D IRECTLY

Consumers Authorize IoT devices to make

payments on their behalf, also expanding
to M2M payments
Is transitioning us toward new units of value
across augmented worlds

©2020 Mastercard. Proprietary and Confidential

THE DATA PLACES
REVOLUTION
TIME

Until now, data has PEOPLE

been a recorder and
interpreter of the
world,
by 2030 it will EXPER IEN C ES
connect
all aspects of lives,
driven by Open
Data
IDENTITY
Data
Never
Sleeps and
is
informing
new
capabilities
Capabilities changing What we believe as value is changing, and
consumers are putting value into more
how we perceive than just currency, driven by new
capabilities
value

Fast and Smart Hyper Personalisation Eco Systems and

Data Values
Real-time and smart data is New forms of AI are creating Pulling together data across
bringing data to the consumer, hyper-personalisation, richer and ecosystems, relationships, and the
in micro-moments, helping contextual sensory services causes people care about, into a
customers solve problems. tailored to consumers needs single integrated experience
Data is part of the New Capabilities are driving a new value-
based economy, leading to new forms
Universal Value of universal value
Exchange

Trust &
Reputation Capabilities are creating a basis for
what people will exchange for
value.
Data is one of these new value
Universal Value exchanges, which not only
Values Data
Exchange stands alone but plays a role in
the wider new universal value
ecosystem
“Every country will have to earn its place in a more fragmented value-
based international economy” – Mark Carney

Crypto
Data will start to flip Data ownership will switch the
consumer to the supply-side and the
traditional value (especially digital) merchant and
platform to the demand side
models

Data supply will dry up for

those companies that do
not have any meaningful
value exchange for users
to share their data.
Value differs per
context

Data as a utility
Valuable if you use it
Data as an exchange
Valuable as an asset
 New
Realities
will
te

create
more data

New
Data Observed Observable Associated Derived
Powering the next
economy

3 Trillion
global revenue
Virtually every activity creates from the data
a data trace unlocking new economy
ways to engage, shaping a
new economy 550 billion
predicted value of
Europe's data
economies by
2025

June 20,
2023
Unlocking this value in data is crucial to utilising this
new asset

With storage set to be a premium and limited, focusing and storing only valuable data is
key.

Internal Value of Information External Value of Information

Business and Intrinsic and Customer and Market and

Economic Value Performance Value ecosystem Value Regulatory Value

Understanding dimensions of value will turn data into a liquid asset that can be turned
into value regards of reality

June 20,
2023
 Improvin Wrapping Selling
g

Using Data to keep track of Part of Standard Chartered, Solv Dubai Pulse is the means of sharing
changing consumer Kenya is using Open Banking and open data in order to be utilized by
experiences and risks to external data to increase access to people and encourage the innovation
mitigate market failures credit to SMEs, among people
 Smart Contract

Value exchange for data use User data updated

Consent
Store

Open Banking
User Data Trust
Consent ID and updated
data Token

may play a big role

when it comes to
Data
Request to
use service Consent Consent

sharing of value
Request Permissions
and valid
credentials

data
and Augmented Third Party

©2021 Mastercard. Proprietary and Confidential

Data used to create
experiences to wider eco
system for agreed time
period

Augmented Arena

Data Provision and Open Banking

Value Exchange Consent Rails
Apple and XR is the
vehicle to next wave
of
payments and data

©2021 Mastercard. Proprietary and Confidential

To deliver on the opportunity's
challenges remain

Data privacy and Regulation is struggling Even with the emergence of

consumer confidence to keep pace with
changes standards, there are still many
Data inclusion and lack of Fraud and cyber open questions and challenges that
access to digital still an needs to evolve
issue
will need to be addressed to create
a
sustainable, new value based
Data could become The role of value is
unavailable for research not an industry economy, which will put users and
and health due to users concern businesses at the heart of this,
holding onto data and not Business models are not
sharing prepared for changes
enabling a successful transition to a
ahead future of connected data driven
augmented realties.

June 20,
2023
This is just the beginning
DATA
i s Sp an n
ing e co s ys
te ms
+ Without data there
is no Metaverse

+ Data is being created

and used across realities
In multiple ways

June 20,
2023
New use cases The vision for Web3 may not be fully
realized, but data is changing role
are emerging and becoming the primary actor

Data Data as a Personal Data

Trusts Token Stores
As users own their Ocean Protocol BBC runs an
data, banks and third provides a means for experiment where
parties will start to turning data into users tv shows come
manage users data on tokens, sold via smart from data held in users
their behalf. contracts. own data pods
All of this will Reimagine
Money our idea of “what value
Changing Hi Andrea
is” will create new business Welcome back

models, new economies, and drive

digital inclusion.
Fiat
currency NFTs CBDCs

Crypto Solar Programmable

currencies Credits
$
currencies
Next-gen wallets

©2019 Mastercard. Proprietary and Confidential

will be the
gateway to the
Loyalty
e eMoney Data new digital
points ecosystem

The digitization of currencies and the tokenization of goods, coupled

with programmability, leads to faster, more intelligent transactions.
Things to
Consider

Identify the value of your data; What data business model do

what to store or not? you want to adopt?
• Test & Learn start with questions not the
• Build foundations and clear data
strategy and ask where should I data
have invested in 2023

• Leverage the power of your brand and

• Treat Data like products and use partner ecosystems for data and
embrace them as revenue technology where required
generators

• Align to your data strategy and corporate

• Don’t try to build everything at objectives showing how data contributes
once
and show value as quickly as possible
Thank
you
Michael Clark
Vice President
Digital Platform Lead | Digital Labs

JUNE 20, 2023