Innovation has come fast and furious from other corners of the payments industry, with emergence of new networks such as Bling Nation, and the purchase of Revolution Money by American Express. Analysts say MasterCard’s lab is likely not a direct response to these developments, or a play aimed at Visa-Bezard says MasterCard does not suffer from an innovation gap against Visa-but rather a strategy to get out in front of innovation, rather than waiting for development elsewhere.
Bezard says he doesn’t think the big card firms like Visa and MasterCard are “losing sleep” over ventures like Bling and Revolution Money. But he also says there’s a realization at the larger card firms that “they will need to be in the driver’s seat, not in the back seat” when developing new technology.
The lab will also work closely with Josh Peirez’s innovative products team at MasterCard. In an earlier interview, Peirez told BTN that MasterCard is interested in developing new payments technology in an environment in which banks may lack the IT funds for large scale payments tech projects.
Red Gillen, a senior analyst in Celent’s banking group, says MasterCard’s challenge beyond developing and testing will be distribution and building a case for adoption among consumers.
“How do you get the product out? Direct to merchant? Or a bank? Or a mobile carrier?” he says. “Also, I think that a quick development cycle isn’t necessarily a good thing. It’s better to do one thing right that will last over a multi-year cycle.”