The payment industry in the US has been undergoing a whole payment shift in the last couple of years driven by rapid fintech growth and evolving consumer expectations.
In the same beat, traditional financial giants, like Mastercard, have been strategically adapting to this rapid shift. This is owing to the fact that consumers are increasingly leaning towards digital, contactless and mobile-first payment experiences.
This shift is being felt in different industries, one of them being the iGaming industry. You see, gamers expect that payments will complement the games, not compromise them. That’s the reason 42% of gamers say that they want easy checkout for in-game currency.
With a payment system like Mastercard, gamers are given the experience they need for streamlined payments. In fact, an official review from betting.us reveals some of the best Mastercard betting websites you can find in the US. In such sites, you get to have great gaming experiences as well as smooth payment. All this adds up to the enhanced user experience.
But now, as both Mastercard and fintechs try to push the boundaries of digital finance, data shows the kind of rivalry (or collaboration) that is working to transform how Americans handle their payments.
The dominance of Mastercard
Mastercard has been a global force in the payment sector providing a wide array of services for their customers. In 2022, Mastercard generated a whopping $22.2 billion in revenue, with the US contributing a significant proportion to the same.
In a bid to offer even better services, Mastercard is already harnessing AI models to combat cybercrime. In recent days, cyber criminals have been harnessing generative AI to maliciously acquire personal and financial information of customers.
However, with Mastercard’s Decision Intelligence Pro, the payment function can scan over 1 trillion data points to predict in less than 50 milliseconds as to whether a transaction is genuine or not. This move helps boost fraud protection at an average rate of 20% and in some cases, even 300%.
Another thing that Mastercard is introducing, especially in corporate payments, is the use of virtual cards. You see, corporate payments have been taking slower steps in evolving to the digital world. However, a payment system like Mastercard is proving to be the way out for such kinds of enterprises.
Virtual cards create an automated reconciliation that helps businesses make real-time payments, manage costs effectively and prevent fraud. By the end of 2029, the total market for embedded finance might reach $251.5 billion.
Fintechs gaining ground
Fintechs have been rapidly gaining popularity across the globe over traditional payment services like banks. In fact, their growth is forcing the different payment systems to come up with strategies that can help them remain competitive.
Fintechs like Stripe and Adyen, which offer services for online businesses, already rival the largest bank-owned merchant acquirers in transaction volume. Well, according to Boston Consulting Group (BCG), for payment companies to remain competitive and remain profitable, they have to upgrade outdated systems. And as Inderpreet Batra, the MD of BCG, said, “the days of easy growth are over.”
One trend that is growing among fintech users is the pay-by-bank service. In the US, the pay-to-bank service has been gaining momentum with approximately 67% of consumers being open to it. In fact, this trend has hit so hard to the extent that consumers are opting for this option even when credit and debit options are available. Openness has increased by 72% among fintech users and 74% for millennials.
The grandest thing about fintechs is that they are not working to just acquire customers and rack up transactions. Their main aim is to capture primacy, in such a way that customers will feel the need of making the service their main financial hub.
The collaboration between Mastercard and fintech startups
Being one of the biggest and most prominent fintech innovators, Mastercard has been partnering with some promising fintech startups in the market. Mastercard unveiled a program that incorporates a number of startups that would drive innovative solutions across various industries.
In the first cohort of the Start Path Acceptance program (the name of the program), there are six companies, including:
- Cardstream
- Hook
- Omniretail
- Tazapay
- Nearpay
- Gr4vy
These startups are focused on coming up with low-cost solutions for small businesses. According to Mastercard, this collaboration would birth innovations and give provision for startups to refine their solutions.
In addition to the Start Path program, Mastercard also offers a Success Planning for Fintechs (SPF) program for fintechs. This program is designed to provide expert advice to help these startups work around vital payment plans and topics for success in both the long and short term. Just imagine fintechs being equipped with comprehensive knowledge and readiness while focusing on key areas, including:
- Operational efficiency
- Fraud and risk management
- Cardholder lifecycle management
With the deep knowledge that Mastercard has and the enthusiasm brought by upcoming fintechs, the payment industry is quickly shifting. Mastercard also offers ‘Engage’ and ‘Fintech Express.’ All these programs are all in place to make payment solutions even easier.
Wrapping up
As the payment industry continues to grow, there are shifts that we can clearly see happening. The market is continually increasing at a rapid rate, and we can also experience different trends happening. For example, Mastercard is helping to lift other fintechs, a move that is proving to be effective in growing the whole sector.