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Podcast: How Mastercard deploys APIs


May 16, 2024


Payments behemoth Mastercard uses APIs to develop a wider range of products for business clients. 

The company processes roughly 125 billion transactions annually and managing data flow through APIs makes Mastercard’s operations efficient, Chad Wallace, executive vice president and global head of commercial solutions, tells Bank Automation News on this episode of “The Buzz” podcast. 

Deploying APIs within its operations helps Mastercard “standardize the way that we design our applications internally,” Wallace says, adding that APIs help tools and products communicate with each other and pass data between each other to complete processes in real time. 

“We’d like to deliver real-time customer experiences,” Wallace says. “The use of APIs allows us to be able to manage those internal applications in a way that really helps us deliver a real-time experience.” 

Mastercard also integrates its financial products to its clients through APIs which allows greater security and control over workflows, Wallace says. 

“Those could be expense management platforms, those could be procure-to-pay platforms, or in a cash platform,” Wallace says. API connections allow Mastercard to provide a better customer experience because “the more that we can integrate the payment into the actual workflow for the finance team,” the more seamless an experience Mastercard can provide. 

Listen to “The Buzz” to hear Wallace discuss Mastercard’s API strategy, B2B solutions and virtual card innovations. 

The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

Vaidik Trivedi 10:40:16
Hello, and welcome to The Buzz bank automation news podcast. My name is where the three the attendee associate editor of bank automation News. Today is May 7 2020. And joining me is Chad Wallace is the executive vice president of b2b Solutions at MasterCard, and is tasked with developing and deploying digital payment solutions for businesses. Chad will talk to us about how MasterCard approaches innovation. What are some major pain points for businesses? How does which we got fit in the ecosystem to solve those problems? And what’s in the pipeline for MasterCard? Welcome to the bus chat. Can you tell our listeners a little bit about yourself? Yeah,

Chad Wallace 10:40:58
absolutely. So first and foremost, thank you for having me on today. So a little bit about myself and what I do i i joined MasterCard roughly about two years ago to lead our corporate payments business. And so I lead our product or engineering and our business development teams around the world. And we designed products that are geared towards corporates, specifically large enterprise corporates. And what we do is we look at opportunities to help finance teams and HR teams better manage their cash flow. We partner with many financial institutions in this space to develop software services. And those software services are designed for things like our corporate card program. We have tools and accounts payable and accounts receivable, sometimes those are financial products that we offer to the financial institutions who then offer them to their corporate clients. And then sometimes they’re more software based products. So we do have a number of products that help on accounts receivable, automation and accounts payable automation. And but ultimately, our end goal is to be able to help those corporates that are using our products better manage their cash flow, better manage their procurement processes and better manage their treasury processes.

Vaidik Trivedi 10:42:10
bill payments is a very complex field. And there are many nuances and many technological developments that happen in this landscape all the time. Let’s pick out one specific thing. I personally want to know what API’s are. And how does MasterCard use it? What are its main benefits in simplifying and modernizing the payments? Landscape? Yeah,

Chad Wallace 10:42:34
absolutely. So in MasterCard, you know, we have a broad range of products and services that are designed for consumers, for businesses and for enterprise customers. And we use API’s for connectivity purposes all over our organization. I think, at last count, we have roughly about 125 billion transactions that we manage on an annual basis just alone. And so a broad broad set of payment capabilities that are available for our customers. When I think about the use of API’s, we certainly think about those in the context of internal use cases, as well as external use cases. And I’ll give you a few examples. And the uses of API’s allows us to standardize the way that we design our applications internally. So that way, various different tools that we have, can communicate with each other and pass data between each other and make our products just more real time. Ultimately, we’d like to deliver real time customer experiences. And the use of API’s allows us to be able to manage those internal applications in a way that really helps us deliver a real time experience. But we also use these externally as well. And so when we think about integrating with financial applications that corporates use, we’re often using API’s to do that integration. So those could be expense management platforms, those could be procure to pay platforms, or going to cash platform. So think of the accounts payable platforms or the accounts receivable platforms. Well, what we’re doing is we’re really integrating our financial products into those tools. So that way, at the point where someone goes in and needs to be able to pay an invoice as an example, they have the optionality to, you know, pay that using, let’s just say a virtual card. And in this respect, and so many of these financial tools, such as ERP systems, or procurement platforms, or expense management platforms that we partner with, are integrating with the set of API’s that we offer, so that way they can deliver those experiences embedded into their solutions. And what that does is it really allows us to create more of a consumer grade experience for our corporates, the more that we can integrate the payment into the actual workflow that the finance team is trying to manage through the closer that we are to be able to provide one seamless experience where payment becomes just part of the workflow itself. And it doesn’t necessarily have to be a separate application where people will need to swivel chair between two different platforms to manage both the ERP. And then the payment itself is, you know, one example. So the use of API’s is really critical for our our success at MasterCard in their commercial space, we’ve offered and launched a number of new tools, I’ll share just a couple of those, just as Recently we launched a new business payment control API. What that does is it allows our financial institution partners fintechs, and some of the financial tools, some of the software tools to be able to integrate to our platform and set card controls at the network level. And so that’s a really incredible way for our partners to integrate deeply into our network, and allows them to give real great security and control on the payments so that way they can manage their their payment workflows very closely. We’ve also done integrations in the ERPs. As I mentioned before, with companies like Oracle, with SAP Talia, we’ve nounce those partnerships. In the past, there’s Republic, and Windows as an example, with Oracle, we’re embedded, you know, deeply into their Oracle Fusion platform, we’re at the point of invoice presentment, we’ll be able to create a virtual card manage the payment of that virtual card directly within their application. Similar with SAP Toyah, the same thing we do there, it is a partnership where at the point where a payment run needs to happen, those, those virtual cards are ready to be used for those invoice payments. And it’s all integrated through our set of API’s that we offer to our customers.

Vaidik Trivedi 10:46:53
They b2b payments are one of the biggest payment blog on the planet. And there is tremendous payment volume that flows through the token, what are some of the biggest pain points that you see in this payments landscape? And how do you approach in innovating and solving those pain points for customers?

Chad Wallace 10:47:15
Yeah, so maybe the first thing to cover would be how we how we think about solving those types of customer pain points. And so we spend a lot of times with a lot of time with various different customers. So thinking about not only with the financial institution or FinTech partner that we have, or even the financial application, that we partner with what their needs are, but we actually spend a lot of time directly with chief procurement officers with treasures, with chief financial officers really getting to a point where we know deeply how their accounts payable process or procurement process or accounts receivable process works, listening to customers, and shadowing them in the context of making sure that we really understand what problem we’re solving. And sometimes that problem isn’t necessarily visible or transparent to the customer. It really gets to the point where when you’re shadowing a group of people, and you just start asking various different questions, and some of those questions result in potentially new product ideas, which, you know, we always find fascinating, where we’re looking for new innovation. When, when we see some of those challenges as we shadow some of those customers, as we talk to chief procurement officers as we talk to their teams, we find a lot of people have, you know, various different levels of understanding of how to manage their payables flow as an example, for b2b payments. Some people are using your traditional wire transfer or EFT methods of payment. And they’ve been doing that for a long time, we see a lot of people in the corporate world still using cheque and still using cash. in certain markets, certain markets across the globe are more digitized. And so therefore, you don’t necessarily see much check in cash. And so the variations of what payment schemes exist within various different markets. It does change the behavior and changes the way that people are attempting to make those b2b payments. But in some markets, you’ll see a predominance of cheque and cash, and then some EFT or wire transfers being used. And the one thing that we have been focused on at MasterCard for a while is around our virtual card strategy. We kicked that off roughly about 10 years ago. And what we’ve been doing is initially started off with offering those use cases for people. So people who wanted to create a secondary card number on the fly within a mobile app, we had a we have a tool that does that. And we’ve actually found a number of interesting use cases in the b2b space for virtual cards as well. And you can think of a virtual card to be a product that if you have a credit card line, a corporate card line of credit with your financial institution, we can create an on the fly 16 digit card number that’s used for a very specific purpose. It’s locked down. We can say that it’s for specific merchants for a specific period of time, for a specific amount, we have all these different types of controls that are allowed to be created on the card. So that way, the people using those cards can really pinpoint how they want that transaction to be used. And it gives them a lot of security and control around that. And when we started introducing this, for b2b transactions, it was a great way to pair the payment with the opportunity around working capital as well, because ultimately, this is a credit line, the credit line is available for the customer to use, and then you know, they make those payments, or they can pay their suppliers early, take advantage of early payment discounts, and then at that point, and pay that line of credit off at the appropriate time to financial institution. So it gives them that flexibility of working capital for a period of time, but also manages the payment and an extremely secure way. And we’ve seen the, you know, a number of different use cases here that have come up in this space and b2b. One is you think about a corporate accounts payable process, you often end up having some strategic spin where that strategic spin is large, extremely large payments that need to be made, they could be professional service related, this could be vendors that you need to pay, could be software providers that are providing, you know, large scale stuff, software solutions for you. And then there is more of let’s say, let’s call it the tailspin, essentially, you know, this, the smaller dollar payments were vendors that don’t necessarily get paid on a very frequent basis. And the initial view sige of those virtual cards was really around trying and procurement cards was really around trying to manage that Tailspin process because it’s expensive to be able to input the information into the supplier master the ERP manage the manage that process overall. And so often people were using a procurement card for those smaller transactions. And then we’ve seen the rise and use of virtual cards for b2b payments for that tailspin. But more and more over the last few years, we’ve started to see people use it for strategic spend as well for the working capital reasons, which is a big reason why MasterCards very invested into making sure that our products and services are designed well, and meeting the needs of for a b2b payment perspective, in the virtual card space. We’re constantly looking to innovate in that space. And just, you know, going back to the API comment earlier, being integrated with all of these platforms, like ERP systems and procurement platforms is a key pillar of our strategy. When, when I think about the uses of virtual cards, also, we’ve been, we’ve been very interested in how we can apply mobile virtual cards in the context of being able to use those for petty cash use cases, as well as employees who don’t necessarily travel a lot. But perhaps they need to travel once a year, you don’t necessarily want to issue a physical card to those folks, or have a card man to be managed full time. But I buy those folks. But maybe it’s a trip that one person needs to take in, they only travel maybe once every quarter, once a year, and you don’t need to necessarily create an entirely new card for them. So the use of those virtual card capabilities for mobile use cases in the context of employee travel, candidate travel is on the rise as well. And just last week, we launched our mobile, our proprietary mobile virtual card application. And so that brings just yet another option to the market for MasterCard issuers and MasterCard customers to be able to manage their Vcn spend on a mobile device.

Vaidik Trivedi 10:53:51
So what will actually cards, there are very interesting offering, as you just mentioned that earlier this month, MasterCard launched its own virtual card offering. And you said that you have been working on this technology for nearly a decade. Can you tell our listeners a little bit about the product that you recently launched? And what growth opportunities do you see in virtual card market? Are we gonna see more virtual card transactions in the future compared to physical card transactions?

Chad Wallace 10:54:21
Yeah, so great, interesting couple of items that you bring up there. So yeah, as I mentioned earlier, we do have we’ve been pioneering this information, this technology for about the last decade. We initially started out in the consumer space, we then launched our b2b services which essentially we create a virtual card we send that to a supplier supplier then can take that card. Earlier this month, we launched our mobile virtual car capability. And so that’s great for use cases such as petty cash you usages people that don’t travel much, but I’ll share it another one. Another example that we heard is that we went out and talked to a number of Chief Human Resources officers and the Chief Human Resources officers talked quite a bit to us about the fact that whenever they bring in candidates for interviews, that the process was clunky You know, candidates would have to spend the money on their personal card, they would submit their receipts, those receipts would then be reviewed by their finance teams, they would go through an approval process, and then a truck would be cut to the candidate to pay them back for the travel associated to that interview. And by offering mobile virtual cards, we can create, we essentially now a product that’s designed for someone to digitize that process entirely. And so you can issue a mobile virtual card that can be branded associated to the financial institution that’s offering this this product through through us. And what it allows you to do is to send that to the candidate, the candidate can use it to book their travel, they can go on to their airline site, book, The travel, they can go and pay for their hotel, they can pay for restaurants, they can pay for the transportation to and from the office as an example. And it really allows a lot of control for that camp for the corporate who’s managing that candidates travel in to know exactly, you know, what they’re doing, what they’re spending their, their funds on, and make sure that they’ve got the proper data to be able to reconcile that easily without having to ask for manual receipts. You know, I think that’s one really good example of us thinking outside of the box, and really looking at use cases that are beyond just traditional finance use functions. But you know, as we sit down, and we talk to these various different people within organizations, we’re finding a lot of different interesting use cases come up for the use of virtual cards. And outside of what we launched earlier this month, which is that mobile Vcn product that allows our issuers to be able to manage those through the app that we created. We’ve also been very invested into working with various different industry verticals, to create ecosystems. And so our travel use cases for virtual cards are very strong. You know, we partner with many online travel agencies, financial institutions, airlines, and hotel chains to build capabilities to where when an online travel agency receives a booking, that airline or that hotel chain can be paid using the virtual card product received those funds real time through the network that we’ve created. And and that’s been a, it’s been very interesting product that our customers have been very strongly positively responding to. We’ve seen those use cases as well in areas such as health care, and education. I’ll give you an example for the healthcare use case, we partnered with a company in India. And what they do is they manage claims that are happening between insurance companies and hospitals or medical providers. And it the use case was very interesting, because we, the insurance companies need to be able to pay the medical providers, and the hospitals and medical providers talked about the fact that they really need to focus on the working capital benefit that they’re getting, because they’re getting paid earlier. And they’re able to manage their cash flow better. And so we’re seeing a really interesting use case in the healthcare space in India popping up for the use of virtual card. And on the education side, we partnered with companies to be able to manage where students pay a payment aggregator and those payment aggregators, then pay the universities. And so that’s been a really interesting use case as well in the virtual card space. But we continue to see these different methods of where people want to marry that payment capability with the working capital. And, and that gives a really strong value proposition to why people are starting to use virtual cards more and more. Overall,

Vaidik Trivedi 10:59:04
data is the new goal for many industry verticals are so I’ve been hearing that from a lot of people. Can you tell me how this essential resource is restructuring executive leadership’s across board? And how is MasterCard looking towards this resource? How are you using this for innovation and technology development? We

Chad Wallace 10:59:30
do hear that data is a massively important part of the CFOs function. You know, you see people moving into CFO roles who are very interested in making sure that they’re making qualified decisions around how to run their business and making qualified decisions around how they run their business is predicated on the fact that they have really strong data to support the analytics and support the questions that they need to ask in order to better manage their their capital overall. And the thing that we continue to hear is how managing that data is very important for the CFO. You know, we hear it through our conversations with Accounts Payable teams, we hear it In our conversations with the receivables teams and with the Treasury teams, and overall, you know, it really becomes a cornerstone of what we think is important for those finance teams to manage. Some of that is based on where you know, the amount of data that’s stored in the ERP or the procurement platform, and how that gets integrated across the payment networks. You know, we see that there’s a lot of opportunity there for us to be able to help financial institutions and help our core corporate customers to be able to manage the two of those together, we launched a Accounts Payable analytics platform. And as part of that, what that platform does is it allows us to take a look at a corporates Accounts Payable file, and think and take a look at various different aspects of data that we aggregate to be able to help them make better decisions, some of those decisions around how to pay so we can qualify whether or not the supplier is willing to accept a car transaction, the parameters around how they want to accept that car transaction, so is there up to a certain limit certain types of buyer supplier relationships that they would like to manage the card, or if they should use a EFT or wire transfer in that space. We also look at things such as managing suppliers ESG scoring. So we have tools that are designed to allow a buyer to scan their supplier base and really understand from a sustainability perspective, where their suppliers are. And we’ve seen a lot of really interest in that product, due to the need and the push for more ESG friendly capabilities and making sure that people supply chains are ESG friendly. And then we also have tools that help buyers manage the supplier, the suppliers risk profile as well. We have a product called Risk recon and risk recon allows you to really take a look at the suppliers from various different aspects, including their their health from a cyber perspective as an example. And so we know that the corporates are very interested in making sure that their supplier base is sustainable, that they are protected from cyber events and how they manage that data, it becomes continuously very, very important for them to them to be constantly looking at and making sure that their supplier base is, is working well and working efficiently for them. We think about the integration of the tools and services that we have, we have already announced our partnerships with those various different ERPs that I mentioned in the past, but we continue to embed those data assets within those ERPs. And there’s payment products within those ERP systems as a key point of differentiation, where the combination of the ERP with the power of the network that MasterCard has really allows us to be able to create that that really compelling product that helps our chief financial officers make better decisions around how to manage their capital, how to how to manage their treasury function, and how to manage a payables and receivables products.

Vaidik Trivedi 11:03:30
That’s really interesting. I’m actually looking forward to what you guys come up in the coming time. So looking ahead in 2024, what are some key trends that you’re noticing in b2b payments landscape? And what’s in the pipeline for you?

Chad Wallace 11:03:45
Yeah, so a couple of trends that we have been very focused on, I mentioned the launch of our mobile app, we are strongly we strongly believe that the corporate lifestyle that people has and employees should be equally, the applications that you use should be equally as proficient from a experience perspective as your consumer life. So the more that we can upgrade the digital experiences to be more consumer grade, we are very focused on that. And mobile is one aspect of that. As an example, with our mobile virtual card product, we also have use cases where truck drivers that are managing, you know, moving trucks across the country, will you leverage that product to be able to manage their spend better. And so that centralized reporting and that centralized Spend Management allows our fleet drivers to use the product really efficiency efficiently, and they’re using that through the mobile apps. And we’re also seeing a rise of the adoption of mobile specifically in various different markets and jurisdictions that are more tapped to pay or more contactless friendly. I happen to be traveling to Australia and happen to lose my wallet on the plan, not a great moment for myself. I happen to lose my wallet forgotten on the plane, got to Australia and was able to pay for my hotel pay for all of my transportation pay for all of the restaurants through my mobile device, I never once had to have a physical card. And the more that we see the adoption of those contactless environments, the easier it is for us to create those types of experiences for our customers who were using our corporate card products as well. The other one that we’re seeing quite a bit is really moving to like a touchless expense management environment. We have been partnering with a number of expense management firms and driving innovation to provide as much data to the expense management platform in a real time manner as possible that the moment that transaction is either swiped or tapped, we can provide as much data as possible to the expense management platform so that way, people can reconcile those expenses right then and there. And we have found that the more that people are able to get that notification on their mobile device, that they can take a picture of the receipt, if that’s needed. For that that specific transaction, let’s say they’re sitting at a restaurant, they have dinner with 10 of their clients, there’s a person and they need to be able to take a photo of that, prompting them to do that, at the time where the card is, is tapped or swiped or dipped, it would be able to allow for us to be able to have a much higher adoption. And so that touchless expense management experience is really driving a lot of innovation in the market. So I think it’d be great if we’d never had to manage expenses and or manage receipts ever again. And it was completely digitized. The other thing that we’re seeing a lot is a big focus from our corporates related to managing cyber risks. And there’s certainly a you know, very strong interest from both of our financial financial institution partners, as well as the corporate strap lead to manage cyber risks that can be popping up from various different various different reasons. And you know, that is driving a lot of the work that we’re doing within our b2b team overall.

Vaidik Trivedi 11:07:22
Well, I have one more question that I want to know about. Were you able to find your wallet after that?

Chad Wallace 11:07:27
I did not unfortunately. But I did have all my cards reissued to me and most of the cards are digitally reissued to me. So that was, that was great. And then by the time that I got back home from Australia, most of the physical cards are in the mail. So yeah, it worked out pretty well. Luckily, luckily, I went to a country where tap to pay was very widely adopted. Let’s

Vaidik Trivedi 11:07:50
say your innovation is coming in handy for yourself that’s

Chad Wallace 11:07:55
talking about eating my own dog food.

Vaidik Trivedi 11:07:59
Well, thank you so much for joining us today on our podcast. It was lovely having you and hopefully we get to have a chat soon.

Chad Wallace 11:08:06
Absolutely. Great. Thank you for having us and we’re excited to continue the partnership.

Vaidik Trivedi 11:08:14
You have been listening to the buzz, a bank automation news podcast, please follow us on Twitter and LinkedIn. As a reminder, you can rate this podcast on your platform of choice. Thank you for your time. And be sure to visit us at Bank automation news.com For more automation news

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