Mastercard is nabbing red-hot fintech customers like Brex and SoFi from rival Visa. Here’s the card giant’s playbook for courting the deals.

Sherri Haymond Mastercard

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When personal-finance startup Dave was considering switching its card issuer for a new product, the pitch from Mastercard came straight from the top. 

The company was preparing to launch Dave Banking, a spending account with a debit card, and mulling its options. The fintech had established itself as an up-and-comer in the space — nabbing a $1 billion valuation and backing from the likes of Mark Cuban — but was still relatively young in its life cycle.

However, the youth of the company didn’t stop Mastercard CEO Ajay Banga from taking Jason Wilk, cofounder and CEO of Dave, out to dinner in an effort to court the startup’s business. 

The effort left a lasting impression on Wilk, who ended up picking Mastercard to be the exclusive partner of Dave Banking, which launched this July. 

“Starting so early on the relationship building, you typically only see that from a startup trying to find their first client, not from a company that is one of the biggest companies in the world,” Wilk told Business Insider.

“That level of optimism from all the way at the top of a multi-hundred billion dollar enterprise has made us feel special and let us know we’re building it with a partner that it’s not about the short-term win. It’s about the long-term relationship building,” he added.

See more: POWER PLAYERS: These are the 15 execs at Mastercard leading the card giant’s strategies in new businesses focused on cybersecurity, data, and analytics

Mastercard’s aggressive courting of Dave isn’t an outlier. The card giant has set its sights on fintechs in recent years in hopes of embedding itself with startups looking to become a core part of the next generation of financial services.

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For a fintech, partnering with a network like Mastercard and Visa means it can offer consumers things like debit cards. And since Mastercard and Visa operate globally, these partnerships means that fintechs can expand their offerings outside of their base countries.

SoFi, Brex, and MoneyLion have all announced new products with Mastercard. 

And it’s not just a matter of nabbing business from red-hot fintechs. In gaining these clients, Mastercard is also stealing away market share from its main competition: Visa.

While both networks have seen declines in total volumes amid the coronavirus pandemic, Visa’s market cap remains larger than Mastercard’s. In the second quarter this year, Visa processed $2.5 trillion in payment volume and Mastercard processed $1.4 trillion.

But the networks don’t differ materially in terms of where they can process payments. So courting fintech partnerships often comes down to what the networks offer beyond payment processing, from fraud prevention to consulting-like services for fintechs looking to scale.

A Visa spokesperson declined to comment for this story.

Mastercard created a team specifically for fintechs

One of the key people behind Mastercard’s focus on fintechs is Sherri Haymond, executive vice president of digital partnerships at the card giant. 

In her role, Haymond is responsible for Mastercard’s partnerships and business development across all digital channels with US-based companies. That means managing the relationships with tech companies …read more

Source:: Business Insider


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