Master of the Cards: How Legacy Brand Mastercard has Led the Finance Category to Success

This article was first published on World Financial Review

Morgan Holt, Chief of Strategy, FITCH

Mastercard remains one of the most successful brands in the world and it shows no sign of slowing down. Mastercard continues to provide its customers with new opportunities and ambitions to live better. This article discusses Mastercard’s innovative initiatives that incorporate advanced technologies into financial services in today’s highly digitalised and competitive world.

Every year, the world’s most popular brands are placed on the respected BrandZ Top 100 Most Valuable Global Brand list so we can all review how they are faring with the consumers of today’s world. Amazon topped the list for 2019, having invested in its services and offering to deliver a truly unique customer experience — read more on that here.

But one of the most interesting listees was Mastercard. Pushing towards the top 10 as it ranks in position #12 globally across all categories, the brand enjoyed a 30% year-on-year increase in value on the global brand rankings. Building upon its strong 50-year heritage, Mastercard has developed a rich agility and stayed hyper-relevant across the globe.

Technology has redefined the financial category across the board, giving rise to new consumer expectations and challenger banks that claim to meet them. Considering the sheer pace and progression of life and business as we know it in the last decade alone, you might expect that a heritage brand like Mastercard would be disrupted. Yet, FITCH data has shown that Mastercard has been a significant agent of this change, making it a true success story — both as a brand in people’s lives and a provider of market leading financial services. How has Mastercard become such an icon?

A symbol of financial security and freedom

Such an icon, in fact, it doesn’t need its name anymore…you may have noticed the swathe of press earlier this year when Mastercard dropped its brand name from its famous yellow and orange disc logo and created a melody to accompany its marker instead.

At this point, we must acknowledge the true power of its distinctive brand design. Marketing mogul Mark Ritson’s point that ‘all brands have codes; graphical and symbolic devices that are associated with the company or product’ is true. And the application of these codes should be spread throughout the marketing mix constantly to establish an identity people recognise and resonate with. For over five decades, Mastercard had done just that and so was in a great position to make such a bold move.

Being powerful enough to drop your brand name speaks volumes about how valuable your brand is. It is starkly indicative of where you sit within market culture and in people’s estimations. It’s no secret that people from all corners of the world positively associate with Mastercard.

Using FITCH’s own data model, we are able to codify what customers expect from the experiences brands offer. Powered by the wealth of BrandZ data, our methodology maps it against four basic human instincts: progress, comfort, belonging and independence. We know that when brands position their products and services so specifically in response to one or more of the basic instincts, it’s on the home stretch to success.

FITCH data for Mastercard suggests its consumers have come to associate the brand with comfort and independence. Essentially, this means consumers feel reassured and in control with regards to the Mastercard brand; the brand helps them to learn as well as encourage them to carve their own identity. Contextualised, it makes complete sense: payment security and financial freedom are two very big factors affecting us in our daily lives — especially buying and purchasing at the rate we do currently.

Innovations in the category

Amid the chaotic buzz of modern life — which as we all know, is on 24/7 and on all possible channels -brands need to stand out and give consumers something deeper than just simple convenience, or a fancy product to stay front of mind.

The payment sector is a tough one in this respect. Like many areas of finance, it can be very difficult to translate the USP or capabilities of a brand across the public sphere, and even more so to find what basic instinct a brand can tap into and build on — especially considering the acceleration rate of the entire industry in just one generation. Technology has, like many others alongside it, redefined and recharged the sector completely — from the world wide web opening up the first online transactions, to contactless payments pretty much everywhere.

New technologies have had a positive effect on people’s view of payment brands in the category overall. Digital innovation has helped people to adapt and celebrate new ways of going about their daily lives…and we find Mastercard to have been a significant driver of this change. The brand’s innovation initiatives provided customers with new opportunities and ambitions to live better. The iconic ‘Priceless’ moments from ad campaigns of years gone by were successfully translated into a modern set of significant payment experiences in our digital world, which has likely built up to the result in this year’s BrandZ ranking.

So let’s look a bit closer at these innovations from Mastercard to better understand.

The digital-convenience mindset

Strategic partnerships and communications directed under the reign of current CMO Raja Rajamannar have been hugely influential to building success and remaining relevant. Rajamannar has ensured the brand is taking advantage of trending changes in consumer behaviour and wider market activity; clearly reflected (and rewarded) in that Mastercard is the partner of choice for more than 60 digitised banks across Europe. Why? Quite simply, because it owns this deep understanding, and has a proven track record of innovating to, changing behaviors.

Currently 84% of Europeans pursue digital banking regularly, 63% use mobile banking apps from traditional banks, one in five from digital-only banks and almost two thirds expect the demand for digital banking solutions to increase in the future. Convenience remains the biggest advantage of digital banking solutions at a time when Europeans demand security more than ever as their most important criteria for using digital banking solutions (67%).

This digital-convenience mindset translates into the new technologies and partnerships Mastercard is across as it creates breakthrough services and experiences.

Seamless and secure biometric payments is an area Mastercard’s chief of security has publicly prioritised for a long time, citing that biometric payments not only makes transactions safer but dramatically speeds up the digital checkout time and reduces cart abandonment rates — and this is crucial for retaining its array of partner merchants. The brand is digital fit and future-proofing, which in turn only boosts the smoothness of the payment experience for users.

Intelligent technological solutions

To this point, frictionless transactions are being further enhanced by Mastercard’s focus on human-first conversational commerce. Drive-thrus that we all know and use account for 70% of QSR transactions, and yet the experience has remained very basic and unexciting. As customer expectations rise, Mastercard partnered with ZIVELO to bring a transformative element to the journey, and hopefully meet but also exceed those expectations. Consumers will order from an AI-powered voice ordering assistant, which will then integrate with a dynamic menu display in a timely fashion. The menu will automatically update using a proprietary AI solution developed by Mastercard, to then produce a display which can be customised either for a specific customer, or based on geo-specific details such as location or weather.

This brand-new concept for a typical and popular customer journey (that is yet to be cracked by any other) is a stellar example of everything Mastercard is doing right. We’ve all seen fast food restaurants modernise their venue formats recently, how long until this kind of experience comes to a drive-thru near you?

Smart approach to devices

Over on devices, Mastercard has really dedicated intense focus and investment to ensure it is a leading provider on pretty much all of them. Mastercard’s partnership with Fit Pay highlights the growing ecosystem of technology integrators that have joined its Commerce for Every Device program. Mastercard wants to enable simple payment transactions which can fit every consumer lifestyle and — most importantly — with the highest level of security.

Mastercard doesn’t just rise to the demand for payment capabilities from device brands (who understand it’s imperative to continually expand the value proposition of their products), it embraces the demand and runs with it to successes beyond original projection.

The ability to enable so many devices with payments is an extension of MDES and the Digital Enablement Express (Express)program. Through MDES and Express, any accessory, wearable or device can be payment-enabled to be used at the more than 6 million Mastercard contactless-enabled merchant locations in 77 countries around the globe.Because these device-based transactions are tokenised through MDES, consumers have peace of mind knowing they are protected from fraudulent transactions when using their favorite devices to pay.

What’s next for Mastercard?

The innovations evaluated above are transforming the way global customers interact with Mastercard day in and day out. The brand is moving beyond providing a transaction, to running within ‘ecosystems’; that is, becoming an instrumental part of people’s lifestyles. Very strategic and extremely clever.

Looking to the future, what are the challenges on the horizon?

Today the card payments arena usually results in the middlemen taking a cut. Digital systems, like those used in China and Kenya, could threaten banks and other players. Challengers like Alipay, WeChat and M-Pesa represent different strategies for how to cut different pieces of the card operators pie — but that’s another story altogether.

In the West, digital platforms like Google, Apple or Facebook have their own ‘Pay’ products which link consumers directly to merchants. While the providers do use Mastercard, it really is a whole other story — and especially so in light of recent news from Facebook around its plans for cryptocurrency Libra, set to launch in 2020. How Mastercard develops its partnerships with digital banks like Monzo and Starling will be a particularly interesting area to watch also; especially with the digital-only banks foraying into the serious world of financial services.

As a brand, Mastercard has successfully developed into one that resonates well within the consumer imagination, shaping itself across a whole range of sectors and cultures. To stay relevant and powerful it needs to continue developing intelligent technology which provides value to partners and, crucially, tallies with consumer expectations on experience. It’s already on a quick ascent to the top 10, so it’s all eyes on what the brand will do next to get there.

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FITCH is a global design consultancy. Designing the Future. Online, offline and in person.