Mastercard

Mastercard: The Role Of ‘Instant’ In Improving Consumer Financial Health

To improve the financial lives of millions of Americans, speed matters — especially for FinTechs seeking to bring new products to market digitally and to target consumers underserved by traditional banking models.

In an interview with Karen Webster, Sherri Haymond, executive vice president of digital partnerships at Mastercard, and Dee Choubey, founder and CEO of digital banking membership MoneyLion, delved into how collaboration between the card network and the FinTech will foster new card program launches in 2020 and beyond.

As Choubey told Webster, the FinTech traces its roots to providing financial access to 90 million Americans. Among the New York-based digital banking membership’s offerings are fee-free checking accounts, cash advances, fully managed investment accounts and help for consumers in building their credit profiles.

Looking Under The (Financial System) Hood

Choubey noted that his previous experience at large financial institutions (FIs) provided him with a front-row seat to the momentous events of the financial crisis and the Great Recession. And, he added, with the emergence of the government as a major shareholder of these large financial firms (via capital infusion and bailout packages), a dampening effect was felt on innovation.

As Choubey described it, what he saw from a trickle-down effect was that for the average American, individuals who relied on the financial services system were left behind from an innovation perspective.

According to Choubey, the same innovation that was happening in Silicon Valley, with people learning to lead private lives online with Facebook or LinkedIn, just wasn’t translating to how Americans were transacting, or how much credit or investment services were available or investment services.

He said the years 2012 and 2013 offered a “once-in-a-lifetime opportunity, where the hood of the American financial services car was open — it rarely happens — and we saw the opportunity to create the digital bank of the future.”

And in the drive toward innovation, as Choubey told Webster, the partnership with Mastercard seeks to revamp and speed up payments.

“When you are waiting two days or seven days for your money,” he said, financial stress accrues. MoneyLion, he said, “is playing a part in facilitating ‘instant everything.’”

With a bit of help from Mastercard.

Choubey stated that MoneyLion started having conversations early in the process of its own infrastructure development, as MoneyLion began to deploy tools and features geared toward financial access.

And, as Haymond shared, while Mastercard’s initial network took shape with banks as the focus, that network has evolved to include merchants, digital partners and, of course, FinTechs. Back when Mastercard and MoneyLion first connected in 2013, the payments giant saw an opportunity to build and distribute new services and products to better serve its goal of improving financial inclusion.

“A year-and-a-half ago, when we re-engaged, it seemed like a natural fit,” said Haymond. She noted that the relationship, now cemented through Mastercard’s Accelerate program and gearing up for new card and program launches, has helped Mastercard further define its own roadmap toward enabling greater financial access for Americans.

“There’s been a lot of back and forth, and it all starts with the mission and vision alignment,” Haymond said, dovetailing with Accelerate’s goal of filling a gap in financial services needs for individuals and small businesses that are not being met by existing options.

Drilling down into the mechanics of the relationship between MoneyLion and Mastercard, particular appeal has come through access to developers, and through application programming interfaces (APIs) building on FinTechs’ existing strengths in engineering, development and agile processes.

As to what will define success moving forward and in the longer term, Choubey said progress can be measured through the customer’s perspective, largely through the reduction of financial stress. Basic metrics, he said, can be measured in the time that customers spend with various MoneyLion offerings (through primary deposit or brokerage accounts), measurable improvement in churn and improvement in credit scores — and, of course, a boost in transaction volumes.

As Haymond told Webster, “We are trying to solve problems and deliver on the financial needs of seven-and-a-half billion people around the world — and we can do that through partners like MoneyLion.”

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WATCH LIVE: HOW WE SHOP – TUESDAY, NOVEMBER 10, 2020 – 12:00 PM (ET)

New forms of alternative credit and point-of-sale (POS) lending options like ‘buy now, pay later’ (BNPL) leverage the growing influence of payments choice on customer loyalty. Nearly 60 percent of consumers say such digital options now influence where and how they shop—especially touchless payments and robust, well-crafted ecommerce checkouts—so, merchants have a clear mandate: understand what has changed and adjust accordingly. Join PYMNTS CEO Karen Webster together with PayPal’s Greg Lisiewski, BigCommerce’s Mark Rosales, and Adore Me’s Camille Kress as they spotlight key findings from the new PYMNTS-PayPal study, “How We Shop” and map out faster, better pathways to a stronger recovery.

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