Transforming an urban hub into a “smart city” requires the coordination of many moving pieces. But at its core is data and intelligence needed to both establish connectivity and drive innovation. Craig Vosburg, Chief Product Officer at MasterCard, sat down with PYMNTS to discuss how payments data can be used to help power the interoperability that brings smart cities to life.
PYMNTS: Why do cities matter, and more specifically why do they matter to MasterCard?
CV: Cities matter not only as destinations but because increasingly they will determine the conditions in which humanity lives. They matter because more people – more than half the planet – are living in cities today than at any point in history. In a few short decades, it’ll be 7 out of 10 people. MasterCard is intensely focused on cities and their importance. They do, after all, account for roughly 80 percent of global GDP. That’s why we’ve invested in things like our Global Destinations Cities Index that tracks top travel corridors, the African Cities Growth Index which ranks cities based on their potential for inclusive growth, and of course our Priceless Cities platform that provides a unique opportunity to engage with the best that the world’s top cities have to offer, whether you’re a local or a visitor.
PYMNTS: Smart Cities is a term we hear a lot in the media. How does MasterCard define Smart Cities and what role does MasterCard envision playing in this evolving space?
CV: Smart cities is something a lot of people are talking about – that a lot of people have been talking about for quite some time. But there’s no one standard definition of a smart city. Broadly speaking in my view, a smart city is an urban center that’s digital, connected, inclusive and interoperable. Interoperability is essential, as it allows computer systems, grids, sensors, devices and more to talk with each other in a common language. A smart city uses data and intelligence to make cities more livable, workable, and sustainable.
PYMNTS: How is MasterCard putting some of this thinking around Smart Cities into action in a way that can make a difference in people’s everyday lives?
CV: Smart cities, at their best, enable urban centers to realize their potential to drive economic growth that’s more socially inclusive and ecologically sustainable, prosperity that’s more widely shared, and a better quality of life, not just for the few but for the many. There are a few things that have captured our attention at MasterCard and are therefore areas we’re focusing on.
They include: (1) Efficiency in areas like transit and congestion management; (2) Research we’re undertaking in partnership with Harvard’s Center for International Development that suggests productivity of neighborhoods is correlated with the quality of urban transport; (3) Efforts like high speed, contactless payments using any MasterCard in the London Underground – payments that are now up to nearly 1 million trips per day with cards issued in more than 60 countries around the world; and (4) Initiatives around integrated ticketing across rail, bus, and subway lines and incentivizing changes in consumer behavior to ease congestion.
We’re also leveraging data to drive better analytics and decision-making. Data that describes what’s happening in a city. Data to understand where residents or visitors are spending, what they are spending on, where visitors are coming from, which neighborhood’s economies are thriving or struggling, what international visitors are buying, how small businesses are performing, and others. Data that can be used to more effectively manage a city — for example, using payments data to help manage peak volumes on public transit or roadways or city parking facilities and encouraging alternative times or routes to ease congestion and demands on infrastructure.
In addition to data, we’re focusing on inclusiveness so everyone can benefit. The costs to individuals and the economy of financial exclusion are significant. There are additional costs to access financial services, often through check cashing or payday lending, or in some cases inefficiencies or corruption in distributing social benefits. There’s lost productivity and diminished quality of life in managing things like bill payments, which may require hours to take a bus across town and wait in line to make a payment in cash before returning home again. There’s exclusion from the digital economy, where access to electronic payments is typically a necessity. There’s a general loss of dignity as a result of being excluded from the mainstream.
For these reasons and more, driving greater inclusion is an area we’re intensely focused on. We’ve helped connect 180 million people into the financial system on our way to a targeted commitment of connecting 500 million by 2020. This is part of the commitment we made earlier this year with the World Bank, the United Nations, the World Economic Forum and others.
None of these addressed in isolation is the answer. But addressed together, they begin to weave a fabric of what we can all agree would in fact be a smarter city.
PYMNTS: MasterCard has been a private sector leader in efforts to connect more people to the financial mainstream and more inclusive economies. Public-Private Partnerships have been at the center of those efforts. What role do you see Public-Private Partnerships having in the Smart Cities space?
CV: Where we are with smart cities is kind of where we were with financial inclusion three or four years ago. Public-private partnerships are critical for cities for the same reason they’re critical for financial inclusion. Meeting the challenges of the magnitude of financial inclusion or urbanization is larger than any one sector, industry, or company. That’s why we’re engaging with municipalities and city officials to better understand their pain points and to work in partnership to identify solutions.
Today, talented people can live and work anywhere. Capital can move anywhere. Businesses can go anywhere. This is something Chicago’s mayor, Rahm Emanuel, has talked about. Cities are increasingly differentiating themselves around services, data, and operations through the Internet of Things to stay competitive. There’s a role for companies to play in this new normal that not only helps drive our respective businesses, but also helps make for better cities.
PYMNTS: You recently spoke at the Skift Global Forum, which convenes leaders in the travel and tourism ecosystem around the future of travel. You said that more than ever, payments facilitates travel and travel facilitates payments? Could you elaborate on that a little further?
CV: Travel and tourism is an economic engine to be reckoned with as the world’s largest industry. It represents nearly 10 percent of global GDP. It supports 1 in 11 jobs on the planet. It’s an economic multiplier and key source of economic development. The travel industry is too important to our collective future not to play a significant role in shaping the cities of the future.
Our industries along with the public sector and other industries have a unique opportunity not only to work together in the future but to work together for the future. It’s a future where we have a shared opportunity to help expand global business and business flows, grow local economies, commerce, and tourism, and bring more people into the global economy than ever before. It’s a future where together we can help make cities better and make better cities.
Chief Product Officer, MasterCard
Craig Vosburg is chief product officer for MasterCard. In this role, he leads the development, commercialization and management of payment solutions that create a sustainable competitive advantage for MasterCard and its customers. The Core Products group is responsible for Consumer Credit and Debit, Commercial, Prepaid, and Loyalty Solutions. Mr. Vosburg is also a member of MasterCard’s global Operating Committee.
Prior to assuming this role, Mr. Vosburg was group executive, U.S. Market Development, where he was responsible for building MasterCard’s relationships within the merchant and acquiring community to expand acceptance and drive revenue, leading business development efforts with corporate and government institutions, and developing an integrated pricing and interchange approach to support business growth.
Previously, Mr. Vosburg led MasterCard Advisors’ business in the U.S. and Canada, with overall responsibility for the growth and performance of the consulting and information products and services businesses in the region. Prior to this position, Mr. Vosburg led MasterCard Advisors’ business in Southeast Asia, Greater China and South Asia/Middle East/Africa, with similar responsibilities.
Earlier in his career, Mr. Vosburg was a senior member of the Financial Services practices with Bain & Company and A.T. Kearney, and was a vice president at CoreStates Financial Corporation.
Mr. Vosburg is currently serving as a David Rockefeller Fellow at the Partnership for New York City and sits on the Board of Directors of the New York Botanical Garden. He holds a Master of Business Administration from The Wharton School at the University of Pennsylvania and a Bachelor of Science in Business Administration from Bucknell University.