Mastercard to invest $1 bn in India over 5 years towards tech development

Global payments company Mastercardhas planned to invest nearly $1 billion in India over the next five years towards the development of new technologies and products.
"The proposed investment will be made over a period of five years in our India operations, which includes an R&D facility at Pune and another centre at Vadodara,” Mastercard vice president (customer delivery) Amitabh Khanna told Business Standard here on Friday.

He informed both of these facilities catered to the company's global operations, of which Vadodara provided the backend multiple payments support. He said the company was looking to expanding the Pune centre.
Khanna noted that Mastercard, as a technology driven global entity, was keen to evolve by offering more customer centric and value added services using the digital platform.
Besides, the company is also working closely with technology and financial startups in the country by focusing on the innovation and digital payments matrices under its flagship 'Start Path' programme, he added.
Meanwhile, Mastercard has launched its ‘Team Cashless India’ programme to engage with merchants and consumers across the country to create awareness about the benefits of digital payments and grow the acceptance infrastructure.
The company is targetting at equipping 10 million merchants in India with digital payments acceptance capabilities in near future.
Apart from roping in top cricketer Mahendra Singh Dhoni to augment its reach, Mastercard has partnered with the Confederation of All India Traders (CAIT), acquirer banks and fintech companies to support nominated merchants to deploy digital payments acceptance infrastructure.
He said Mastercard will provide select nominated merchants and consumers a chance to join Dhoni’s Team Cashless India.
“So far, we have already launched this programme in Jaipur, Nagpur, Ranchi and now Lucknow,” Khanna said adding more cities, including Guwahati, would be covered in different phases going forward so as to cover all the key geographies in the tier II and III towns.
He stressed there was a need to create awareness among general public and also merchants with regards to the digital payments space, including their consumer and merchant rights.
Nearly 92 per cent of the merchants in India fell under the micro category, which offers a huge potential for the growth of the digital payments universe.
He further said Mastercard was also working with the mobile phone services companies for their digital wallets and payments.
Replying to a question, Khanna said the digital payments in India was slowly gaining traction, especially after the November 2016 demonetisation and growing awareness, especially among the youth.
“The category grew 6-7 per cent in 2018-19 over the previous financial year 2017-18 and we are seeing a continuous upsurge in digital payments in the country,” he claimed.
Mastercard’s global payments processing network comprises consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories.

Mastercard says it will meet Dec-end target for data localisation in India

Mastercard is confident of completing its data localisation requirements in India by the end of this year. However, says the card payments major, restricting data flows in digital transactions will affect the quality of fraud detection and assessment.
“We are totally committed. In fact, we are in full execution mode...And, we remain completely committed to the end of the year (deadline) that we have given to the Reserve Bank of India. So, I don't see a challenge on the question of data localisation," said Ari Sarker, its Asia-Pacific co-president.

However, he adds, this restricting of cross-border data flow and storing data only in India will impact fraud detection and management.
As an example, says Mastercard, it stores only aggregate and anonymised data, such as the amount spent on a transaction, the account number and so on. If an Indian travels abroad the card gets compromised there, and the fraudster uses these credentials to withdraw money from different ATMs in different country locations, it will be difficult for the person to know on a real-time basis that such fraud is happening.
Similarly, if a fraud trend is detected in different countries and Indian transaction data is disconnected from world data, fraud detection engines here will end up getting built only on local trends.
"Our data scientists tell us that for the sake of accuracy of the trend, you need 13 months of data — then, you can really see how behaviour patterns actually shift. That's the historical perspective you need to create...our view on that (data localisation) is it's actually not in India's interest," Sarker said.
New ID check
Mastercard will go live on Google Pay, the information technology giant's payments app, launched first in India as Google Tez in 2017. "We're going to be live with Google in the first quarter (of the next financial year). The essence is tokenised credentials or pass-through credentials working through Google Pay. The reason we're going first quarter is also because we're also delivering our ID Check capability together with it. It will be a better product capability once we launch through Google Pay," Sarker said.
Last month, Google Pay launched a feature called tokenised cards. This will let users add debit and credit cards to the Google Pay application, which has so far worked only on the Unified Payments Platform in India.

Mastercard to start deleting data of Indian cardholders from global servers

Global card payments major Mastercard has proposed to the Reserve Bank a "certain" date from which it will start deleting data of Indian cardholders from global servers but warned that it would also mean weakening of "safety and security" over a period of time.
In an interaction with PTI, Porush Singh, India and Division President, South Asia, MasterCard, said the company is operating in over 200 countries, and nowhere else it has been asked to delete data from global servers.

The Reserve Bank of India (RBI) in April issued a new regulation, which came into effect from October 16, requiring payments companies to store all information about transactions involving Indians solely on computers in the country.
Mastercard said all new Indian transaction data is being stored at its technology centre in Pune as of October 6, as required by the RBI directive on data localisation.
It has given a proposal to the RBI to delete back data from certain date but is wary of consequences of such a move, including disputes over transactions.
"The proposal we have given (to RBI) is that we will delete it (data) from everywhere else, whether it is the card number, transaction details. The data will only be stored in India ... we will start deleting that...," Singh said.
He further said Mastercard has proposed to the RBI that Indian data would be stored locally and nowhere else.
The senior Mastercard official, however, added that the company has also informed the central bank about the impact of data deletion.
"But we have also said that it does have an impact. No other country has asked us like that.
"No other country in the world has asked us the data to be deleted from the global server and the reason why it is a concern for us because that would be weakening of the safety, security over a period of time," Singh said.
On if the company is seeking any reprieve in complying with the regulations, Singh said the company is planning with the dateline which it has submitted to the RBI.
"I do not want to wait. As far as we are concerned, we have said this is the date earliest we can do... And this is going to be impact in the longer term which you need to consider," he added.
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When asked if the payments gateway was complying with the RBI directives, Singh said from October Mastercard has started storing a copy of the data.
"...the date of (data) deletion (from global servers) is something which is not yet decided as we are waiting for the RBI to confirm back to us," he said and added "we have proposed a certain date on which we will start deleting the data on a running/regular basis".
Singh further said deletion of data is not a simple process like "pressing a button".
"This is because people can charge you...dispute the transactions, that all in process ... it needs multiple players, multiple stakeholders. We have given them (RBI) a proposal and we are waiting for them to confirm back," he said.
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When asked what would be the cost of data localisation, Singh said there will be "incremental cost".
Data localisation requires data about residents be collected, processed, and stored inside the country, often before being transferred internationally, and usually transferred only after meeting local privacy or data protection laws.