PayPal and Mastercard: Big Tech plus big banks can work
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PayPal and Mastercard: Big Tech plus big banks can work

Speaking at the World Economic Forum in Davos, Switzerland, executives from PayPal and Mastercard told listeners that partnerships between big banks and Big Tech can work. According to both firms, they see partnerships with banks as delivering new experiences and deeper levels of trust to their customers. And Bill Ready, PayPal’s chief operating officer, added that it was a “completely false premise” that banks “have to lose” for companies like PayPal to win.

Both companies’ share prices have traded up in the first month of the year

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Source: Yahoo Finance

Elaborating on the false premise that banks have to lose for tech companies to win, Ready said: “It would be like saying ‘well, for smartphone manufacturers to win, cellular carriers have to lose.” In fact, he said, the opposite is true – the two types of business work towards mutually beneficial goals. He added: “The same could be true in the world of fintech and banking. I think partnering with those banks is a huge opportunity to move much more quickly in a way that lifts the entire ecosystem versus saying it has to be a zero-sum game. There's a much greater objective here than saying let's split the pie that exists today. There's a much broader opportunity in the future that we can work together to go create.”

Partnerships across the tech and banking world are still a relative rarity – although ecommerce giant Amazon’s plans to offer something like a bank account to its customers (with help from bank JP Morgan) is a high-profile exception to the rule.

Mastercard’s Ann Cairns offered up the company’s collaboration with Apple as an example of financial services firms and Big Tech working together. She said: “People use (Apple Pay) to go through the London Underground every day and just tap your phone and then it creates a virtuous circle where people are buying coffee and the whole world starts to move contactless. Everyone's trying to provide fantastic user experiences by joining up and partnering and really sharing each other's technology to create the best-end result. And actually it's about creating something that's seamless and easy that people can trust.”

Dominion holds PayPal, Mastercard, and Amazon in its Global Trends Ecommerce Fund.

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