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Mastercard eyes tier II and III cities in India for growth

The brand will focus on driving acceptance and last-mile visibility to unlock the vast potential for digital payments in such markets

Manasi Narasimhan

Riding high on Prime Minister Narendra Modi’s campaign to promote more digital transactions in the economy, Mastercard is now looking to bring in the next leg of its growth by focusing on tier II & III markets.

“We are planning various initiatives to unlock the vast potential for digital payments in tier II and tier III cities and towns. These include addressing all elements of the ecosystem, namely banks, merchants, consumers and the government. Driving acceptance, especially in tier II and III towns and beyond, continues to be a key focus, along with last-mile visibility,” said Manasi Narasimhan, Vice-President, Marketing and Communications, Mastercard.

Narasimhan said the brand will also continue to invest in cutting-edge technology, including AI and more advanced methods of authentication to ensure Mastercard remains the safest way to pay.

The brand will also be leveraging digital media to spread the word and reach out to the audience in tier II & III markets.

“India has got the fastest growing base of internet users in the world. Therefore, digital communication becomes extremely relevant for the Indian audience. We leverage it to educate people about the benefits of digital payments and to nurture brand loyalty. It helps us to take our marketing initiatives to the last mile, have precise targeting and impact measurement. However, we still need to ensure our messaging is tailored according to the business objectives and target audience. Moreover, digital media has been penetrating in the tier II and III towns as well, thanks to the local language customisation. We feel this is the next wave of digital.”

According to Morgan Stanley report, India’s e-commerce market will grow at 30% year-on-year to have a gross merchandise value close to $200 billion by 2026. Narasimhan is also positive that this growing popularity of e-commerce in India will benefit Mastercard.

“In the last few years, ecommerce has seen tremendous growth not just in metros but also in tier II and III cities. In these pockets, a whole new ecosystem is already in creation where consumers would prefer buying online and paying through digital means due to convenience and speed. Mastercard will definitely benefit due to this evolution.”

But while demonetisation gave a boost to card transactions, it also saw the emergence of mobile wallets. So, do mobile wallets pose a threat to players like Mastercard?

“Despite the tremendous growth of digital payments, over 90% of transactions in India today are still done in cash. This gives a tremendous opportunity for all digital payments players to grow, and we believe the opportunity to grow is to further make India cashless, and not fight digital wallets or other digital players. We also look to see how we can partner with digital wallets and other players for mutual benefits to deliver a world beyond cash.”

Now that the storm surrounding demonetisation has finally settled, people who might have embraced cashless transaction out of necessity are turning back to cash but Narasimhan feels the trend is here to stay.

“The demonetisation drive has been a game changer for the Indian economy. It created an array of opportunities for both existing and new players in the payment sector. The Indian payments industry is all set to take a gigantic leap and we have already seen some promising signs. With a significant debit card base and emerging mobile payment systems, which are low cost, open loop and interoperable like Bharat QR, we are getting ready for large scale adoption of digital payments in India. According to RBI data, the number of point of sale (POS) machines increased to 3.03 million in December 2017, up 71% from 1.77 million in December last year. A large number of people from unorganised sectors have started using digital payments because of its convenience. We feel that India’s journey towards a cashless economy will pick further pace in the coming years.”

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