Mastercard: disrupting cash will lead to a better, more prosperous, future
Worldwide, the total proportion of payments that are made in cash (85%) has stayed the same since 2010. According to Mastercard, that’s an unnecessary drain on the global economy. The cashless transaction giant has decided to take matters into its own hands, and disrupt the status quo, claiming it will lead to a better, and more prosperous, future. At Mastercard Digital Indaba, which recently took place at the Sun City resort in South Africa, the company set out its vision.
Mastercard’s share price has appreciated by almost 30% so far this year
Source: Yahoo Finance
Mark Elliott, Mastercard’s division president for Southern Africa, explained the company’s basic thesis of ‘cash bad, digital good’: “Our narrative often talks to the cost of cash. We have done studies on the indirect cost of cash, which is typically between 0.5 to 1.5% of GDP. In South Africa, it costs consumers R23 billion per year.”
Illustrating why cash is an expensive payment method, he explained that consumers who were looking to pay at their local convenience store might have to drive – or even take a taxi – to the bank to withdraw money first. Those miles add up, and effectively place a service charge on cash. Additionally, cash is no better for businesses than it is for consumers: unlike with cashless transactions, paying in cash leaves no digital record of the transaction.
Mastercard thinks that apps are a better payment solution than cash, and the company’s own Masterpass is its frontline product in this regard. Masterpass lets consumers load their credit and debit cards into its online wallet and make payments using a QR code. It’s interoperable, and works with a number of other services.
Speaking about Masterpass, Gabriel Swanepoel, Mastercard’s vice president for business integration and innovation, said that many churches in South Africa had started using it as an alternative way to take donations: i
Dominion holds Mastercard in its Global Trends Ecommerce Fund.
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