#PortadaLat Speaker – MasterCard’s Patricio Rubalcaba: “LatAm has a higher Penetration of Smartphones than Credit Cards”
The tremendous growth of e-commerce and how it impacts the overall marketing discipline and digital marketing in particular is going to play an important role in the program of PortadaLat next Wednesday and Thursday in Miami. We interviewed Patricio Rubalcaba, VP Merchant Development Travel, Retail & Digital Verticals at Mastercard . Rubalcaba is going to participate in the session "We are all e-retailers now." Rubalcaba provided detailed and in-depth answers to our questions on to development of the Latin American e-commerce and payment sectors.
Portada: How is Mastercard innovating when it comes to payments/e-commerce?
Patricio Rubalcaba, VP Merchant Development Travel, Retail & Digital Verticals at Mastercard: "As a technology company and global payments leader, Mastercard is dedicated to accelerating the continuous transformation of the ecosystem for commerce as well as delivering and creating value for cardholders, financial institutions, and merchants. We have developed and deployed a number of solutions designed to make Mastercard the safest, simplest, and smartest way to pay. We have actually a full-blown innovation lab – Mastercard Labs - working on various streams: Internet of Things (IOT), Artificial Intelligence, Blockchain, etc. Through Mastercard Labs, we also provide Innovation Sessions for our partners – in which we actually enable professional facilitation and management for our partners on select areas of their business, where they are committed to innovate.
We have a full-blown innovation lab – Mastercard Labs - working on various streams: Internet of Things (IOT), Artificial Intelligence, Blockchain, etc.
As merchants are an essential part of the ecosystem, we work very closely with the leading players in different industries: Travel, Retail and the Digital Verticals are of key interest to Mastercard - they represent almost a third of the private consumption in our region. Merchant’s demands vary a lot depending on each segment or vertical they operate, their size etc. But there are some pain points that cut across all of them:
Demand & Revenue Optimization:
Merchants want to sell more and optimize their revenue streams. This has become incrementally critical considering competitive dynamics and margin compression. Mastercard can help them to stimulate demand and capture new/better customers, obtain insights through our very powerful data analytics capabilities (as we see global transactions) to empower more efficient marketing efforts, we are very active in customer loyalty/segmentation and engagement programs, and we have a significant focus on adding value in Ancillary Revenue opportunities for our partners.
Ironically payments should be almost invisible in order to deliver an optimal customer experience.
As merchants become increasingly digital, payment becomes fundamental. Ironically payments should be almost invisible in order to deliver an optimal customer experience. We are fully engaged with industry leaders to enable this customer promise. In today’s world, the more invisible the payment experience, the more relevant we are! We are also working with players that are changing the boundaries of the customer journey. They are daring to change the ways consumers shop... whether on e-commerce/mobile formats (through simplicity) or by optimizing pre-purchasing and ordering with pick up or in-store shopping to avoid lines, etc.
Operations Efficiency & Fraud Prevention:
Evidently, payments is fundamental for commerce and for merchants. The ecosystem needs to operate in a seamless way and transactions flow in an optimal way, making sure all good transactions are going through and the bad ones don’t. We are heavily involved in ensuring operations are fluid and that payments are secure and efficient at the same time.
As digital commerce continues to grow, we have to make sure that we drive convergence with these industries. There is much specialization in each industry – our team is focused in ensuring that commerce can continue to evolve in each industry.
How is Innovation particularly impacting payments and e-commerce in the Travel & Entertainment Industries?
P.R.: "The Travel Industry focused early and actually led in e-commerce development. Some travel players were born digital. Mastercard works with each to ensure they have a successful journey. We help e-commerce/m/commerce grow and ensure that payments are fluid. We also drive demand to these channels through our marketing programs. I’d like to highlight that we are incrementally working on empowering the integration of the wallet and the app in order to integrate loyalty, customer engagement and ancillary revenue opportunities for players in this category.
-Airline: we have a recent example of a leading airline that we’ve recently enabled purchasing through a messaging app with Chatbox- the experience is awesome… and is a clear adaptation of where the customers are going.
In the entertainment industry I can illustrate with a couple of recent examples:
-Juan Valdez – a leading coffee provider based in Colombia- we collaborated with them to enable their app development … so customers can order and pay without the painful lines… supporting a good customer experience!
-Stadiums- we have deployed solutions in stadiums where you can order food, etc from your mobile in your seat and have it delivered right there.. without loosing a second of the action…Priceless!
How are your retail related initiatives evolving?
P.R.: "Some retailers were born digital and they have forced a transformation of their category. Retailers globally are working hard to digitize their channels and offer multi-channel opportunities for customers. We are supporting them in this transformation. Some examples:
-Being able to shop without having to make the line (with Masterpass and a QR Code)
-Data Analytics: We have collaborated very closely with retailers in the data analytics space. We have acquired a few capabilities that are centered in customer segmentation and behavior as well as much work in the cause & effect/test and learn space. We are embedded with Leading Retailers in helping understand their customers better and what drives their behavior and what stimulates the right engagement. We also are working with various players in helping them by measuring in a more holistic and systemic way the effect of their promotions, price and channel mix, product and store format changes. Our privileged position regarding data and our assets provides us with this unique view of how to empower a Retailers competitive dynamics and we are proud of delivering this very tangible value."
We have collaborated very closely with retailers in the data analytics space.
What about digital players overall?
P.R.: "First of all, as you can see in my previous comments, Travel & Retail players have been prioritizing digital as an engagement and distribution/sales channel. It is a priority for them, naturally. We work with these players to support their agenda in the digital space. On the other hand, you have the ‘digital giants’ such as Google, Facebook, Apple, etc. who have been fundamental disruptors and catalysts of the digital revolution. We work with these players in a multiplicity of forms, We work with them in the marketing space, Insights and Analytics, we are partnering with them in their engagement with their digital wallets and the payments world, etc."
Brand marketing is only as strong as the customer experience.
How do you see the Latin American consumer e-commerce penetration evolving vs. other parts of the world?
P.R.: "The Latin American & Caribbean Region (LAC) is going through a very exciting stage. It is one of the fastest growing regions from an e-commerce point of view, with growth rates of 20-30% per year. However the penetration is still relatively low, with less than 2% penetration of the Total Regional GDP, which would make it the 2nd lowest regional penetration. It is a very dynamic region and we are making sure that we contribute to drive this growth.
It is interesting to notice the importance of the mobile revolution in Latin America. We are a region with higher penetration of smartphones than financial products such as debit & credit cards. For that reason, we see many players focusing on mobile. We see some category leaders with above 30% of their sales come from mobile… but even in those with less conversion, we see even over 60% of the traffic to their sites being driven by mobile."
How do you see Latin American companies adapting to an environment of strong growth in e-commerce and electronic payments?
P.R.: "Overall, the region is still in a strong growth stage and starting to shift the balance from ecommerce to mobile commerce and will continue to look at how to adapt or shift their core business and functional assets to leverage the value of digital commerce. We see the full ecosystem evolving in this space… Digital marketing channels have exploded and there are new business models and digital native exploding all over the region. Evidently, they are looking at ways to enable the most convenient payment methods and we are working closely with our partners in this exciting stage. I particularly appreciate the fact that there are regional players that are creating new solutions that are born in and for the region – addressing its peculiarities. Whether you are a global merchant or a local player, you have to adapt to the LAC demographics, culture and consumption habits… I am pleased to see that this is happening.
Players in the region are either getting ready to commit to e-commerce or looking at how to improve/expand their capabilities in digital commerce and get to the next level. However, there is still a large segment that is not included currently in the digital landscape. There are new infrastructural shifts that are starting to enable smaller players to be para of the ecosystem.
There are also socio-economic considerations - we see significant opportunity in this process to recognize that there are certain segments that perhaps don’t have a bank account and can’t pay online. This is not ideal for the merchants or the consumers. We are working to address this as a priority to the benefit of all parties."
What role will the "plastic credit card" have in the feature or how will it morph/evolve in the e-commerce process?
P.R. "We are living (and driving) a transformation in this space. We are working diligently with banks to evolve their traditional plastic cards to a digital version of it. Mastercard provides banks with Digital Wallets through Masterpass. Masterpass is a digital wallet that simplifies the checkout process across your purchases online, in-app, and in-store with one secure account. No long checkout forms, forgotten passwords, or fumbling for a wallet. Consumers just create their account and load any participating credit or debit card to get started. Mastercard works with merchants to ensure that all digital wallets are enabled on their sites to enable the acceptance of digital wallets. Needless to say we are shaping what is now digital commerce. You can find more information on this key item on https://masterpass.com/en-us/. Mastercard also has supported the Digital Wallets of players like Google, Apple, Samsung and others that continue to gain significant traction. The next few years will be very exciting!"
What do you think does a brand marketer need to know about e-commerce and electronic payments in order to improve his marketing strategy?
P.R.: "A few things come as top of mind:
First, Brand Marketing is only as strong as the customer experience - this is already top of mind for Brand Marketers. Yet, it is essential to understand that payments is increasingly becoming a core element to enhance the user experience.
Second, The brand experience will go beyond branding as a traditional marketing practice. Brand marketers need to understand the convergence of technologies and channels – and they will need to increasingly expand their knowledge base to achieve meaningful differentiation for their brands. It is not only about reaching the consumers and understanding the new digital formats to get to them, but it is also about how they are engaging and delivering value to their consumers. Much of this part resides in the transactional/operational environment.
Third, Mastercard is happy to partner with Brand Marketers so we can join forces and help them in increasing demand, wowing their customers through priceless experiences that we can co-develop with them, enhancing insights and marketing efficiency through data analytics, strengthen the customer experience and ensure that the payment operation is flawless to help our joint customers receive the best experience possible! We look forward to working with them and delivering value together!"
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DAY 1: SPORTS AND TRAVEL MARKETING DAY (June 7): The first day of PortadaLat will focus on how technological innovation is impacting key segments of business and marketing with emphasis on Travel and Sports. All sessions, keynotes and marketing-tech showcases are included as well as light food, sandwiches and beverages. (US $199)
DAY 2: BRAND INNOVATION DAY (June 8)
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