Payment Methods

MasterCard’s Path To Innovation

“There’s a lot of innovation happening around not only the payments space, but the entire commerce space, and a lot of those technologies are being developed by very interesting early-stage startups.”

That’s Stephane Wyper, Global Lead for MasterCard’s Start Path program talking about why the global payments network decided in 2014 to identify and partner with startups from around the world.

As Wyper tells MPD CEO Karen Webster, “We saw this opportunity where this was this wealth of innovation that was being created,” he explains, “and we felt there was a way in which we could help support that ecosystem.”

There are lots of accelerators and incubators in the world, Wyper acknowledges, but he believes Start Path’s approach to facilitating innovation is unique for three reasons.


The first is the operational assistance that MasterCard can provide, represented by Start Path Global and its ability to provide six months of virtual support for startups that are based outside of the U.S.

The second is the company’s ability to directly connect the startups that it is working with to MasterCard’s own network of customers across the globe, formalized as Start Path Partners. Wyper mentions Santander, Rakuten and Samsung Card as being among the 20-plus customers that are “actively interested in seeing the technologies that are being developed by these startups, either just to build out their own R&D expertise or to look at ways in which they could integrate or test with them.”

The third unique element, Wyper explains, is that MasterCard does not take equity upfront in any of the startups it is fostering through the program.

“We want to collaborate with companies before we look at whether investment would make sense for both sides,” he remarks.

The Start Path Global model is structured to be a flexible one, allowing it to run a new class of “roughly six to eight startups” per quarter, says Wyper, keeping innovators from having to wait any longer than “one or two months” before starting.

In terms of vetting, Wyper tells Webster that MasterCard uses “a very structured process, from a sourcing perspective,” to determine what startups will be invited to participate in Start Path.

Stage is a key consideration. The “vast majority” of the companies in Start Path are “post-seed but pre-Series A,” says Wyper. In fact, almost 95 percent of them are “already in beta or actually commercially live.”

Wyper explains that MasterCard chose to focus on companies at that stage because it’s “the best opportunity for MasterCard to provide as much value as possible, bridging the gap between a product with initial traction and its intended scale.”

Also essential to Start Path’s sourcing process is the type of solution that a startup offers. “We look at innovative technologies that extend well beyond payment, and we use commerce as the umbrella,” says Wyper. “That covers everything from big data to biometrics to wearables to how the retail environment is changing. It’s a very diverse set of technologies that we’re open to helping support.”

As for whether MasterCard, in selecting companies for Start Path, goes looking for specific innovations or adopts a more open approach, Wyper says it’s actually “a bit of both.”

The company does apply directed sourcing, he explains, sitting down with a Start Path partner on Day 1 and learning about what technology areas are top-of-mind for them. MasterCard does the same process internally, always keeping under consideration technologies that companies in “a variety of business areas” are interested in exploring.

That being said, Wyper acknowledges that MasterCard also “keep[s] an open mind,” remaining on the lookout for startups that are “doing interesting things that might fall outside” traditional areas of focus for his company and its partners.

In addition to Start Path fostering companies in the realm of consumer-facing social payments, Wyper points out that a number of the startups within the program are tackling the B2B space. That’s where MasterCard’s expertise in areas of compliance and regulation becomes particularly important, as many startup ventures — while technologically savvy — don’t necessarily understand the complexities of payments.

“We get into very granular issues that these companies have,” Wyper explains. “Compliance, PCI certification, digital marketing, enterprise sales, payment processing. … It’s a diverse set of areas, all of which are very operationally focused and intended to solve very tangible issues.”

On top of that, MasterCard manages a “mentor pool” — consisting of over 60 employees that are experts in one or more of the aforementioned categories — to aid in the journey of startups in the program.

More than 40 companies have been helped by the Start Path program to date, spread across Europe, the Middle East, Africa and Asia Pacific, and encompassing what Wyper describes as a “hugely diverse portfolio.”

Of all the startups that have gone through the program, “only about 20 to 30 percent,” Wyper reveals to Webster, are payment related. The rest fall into a wide variety of areas, including big data, fraud, biometrics and wearables.

One of the companies nurtured by Start Path is Ridango, an Estonian startup that provides an open-loop transit ticketing system; another is the Ireland-based startup Xpreso, which is focused on removing the friction from eCommerce delivery — reducing the window for it from a day down to “about an hour,” says Wyper.

Another example that Wyper shares with Webster is the Toronto-based Nymi, a wearable device that uses the consumer’s electrocardiogram as a method of authentication. MasterCard was “a small investor” in Nymi once it went to Series A, and its goal in that regard, Wyper explains, was to go “over and above just giving them funding, and collaborate to take their technology to market.”

Theirs is a solution that Wyper describes is “consistent with MasterCard’s overall commitment to continue to drive increased security on transactions.”

It’s just one example of the mutual opportunity that Start Path provides — for the startups themselves, as well as for the partners who stand to benefit from their innovations.



B2B APIs aren’t just for large enterprises anymore — middle-market firms and SMBs now realize their potential for enabling low-cost access to real-time payments and account data. But those capabilities are only the tip of the API iceberg, says HSBC global head of liquidity and cash management Diane Reyes. In this month’s B2B API Tracker, Reyes explains how the next wave of banking APIs could fight payments fraud and proactively alert middle-market treasurers to investment opportunities.