Managing Global IT: Priceless

By Samuel Greengard  |  Posted 2008-10-30 Print this article Print

Managing one of the largest IT operations in the world, MasterCard’s Rob Reeg must deal with a variety of technologies and issues, including virtualization, server consolidation, storage, mobility, security and green initiatives.

title=Making Technology Pay}

Making Technology Pay

MasterCard has prided itself on being a company that’s in the vanguard of information technology. Serving more than 25,000 member financial institutions worldwide, MasterCard products, including credit and debit cards, are accepted at more than 25 million locations around the globe. The firm’s peak processing power is mind-boggling. At Valentine’s Day, Mother’s Day and the weeks leading up to Christmas, the MasterCard Worldwide Network processes as many as 55 million transactions in a single day for credit alone.

The network operates under a bandwidth-on-demand model that’s designed to handle any volume thrown its way. Even so, Reeg recognizes the urgency of tweaking, adapting and improving the network—and a variety of other IT processes—on an ongoing basis.

“The primary objective is to enable payment processing from anywhere in the world,” he explains. “The goal is to continue to build out the technology platform that supports the global consumer and business environment. Today, we are seeing a [seismic] shift toward electronic payments and transactions.”

One of MasterCard’s biggest consumer-facing IT initiatives has been the rollout of PayPass, a system that uses embedded RFID chips in credit and debit cards to provide contactless payment solutions. This is a particularly attractive option for convenience stores, movie theaters, gas stations, sporting events, drug stores and other purchase points where fast transaction processing is paramount.

This system benefits consumers by reducing the lines of people waiting to pay for their purchases, and it helps merchants reduce the number of labor-intensive cash transactions. During the first quarter of 2008, more than 28 million PayPass cards and devices were in use, according to MasterCard, and more than 109,000 merchants in 24 countries have adopted the system.

Another key initiative has been the April launch of a new debit-processing platform, MasterCard Integrated Processing Solutions (IPS). The platform offers financial institutions a processing solution that works across multiple banking channels and systems. It allows next-generation ATM networks to integrate with other market channels, enabling banks to promote products, better manage transactions, conduct marketing and promotions, and collect data about cardholder preferences. The system—which is designed to work across countries and continents—also offers more-flexible reporting and analytics without the need to hard-code data.

Mobile commerce has emerged as another area of intense focus. With more than 3 billion handsets in use worldwide, the foundation for future m-commerce capabilities is squarely in place, and Reeg recognizes that person-to-person payments and mobile commerce are inevitable. According to Portio Research, an independent United Kingdom-based research company, the m-commerce market will reach $86.6 billion by 2011.

MasterCard has already adapted PayPass to work with mobile phones, and it has showcased secure over-the-air personalization and payments. It also has developed a mobile reload system, called ePower, which allows consumers to add money to reloadable MasterCard and Maestro branded prepaid cards and accounts.

In addition, the company has developed a worldwide money transfer and domestic peer-to-peer payment system that it plans to pilot this year. The service will allow consumers to exchange money electronically with friends and family through mobile phones and PDAs. Finally, MasterCard continues to leverage its transaction-processing expertise to gain entry into the emerging m-commerce arena, which includes games, music and ring tones.

Samuel Greengard is a freelance writer for Baseline.

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