Ajay Banga: Steering MasterCard towards a World Beyond Cash

Date:   Thursday , July 02, 2015

Ajay Banga, caught the imagination of the world when he spoke about wonders of cashless society after taking the helm at MasterCard in 2010. In his first leadership meet as a CEO of the company, he enthusiastically sketched the ability of electronic cash in alleviating the downside of physical currency that is hard to track, easy to evade tax, and can be used to carry out illegal trade like drug and weapon trafficking.

For Banga, taking over MasterCard couldn\'t have come at the better time. Five years ago, the financial transaction market was witnessing many disruptions headed by companies like Square and PayPal, who were making waves in the mobile payments. Banga was instrumental in changing the image of the company from a payment processor into an innovator during his tenure at MasterCard. The people who associated the company with the plastic card are now seeing it has an experimenter with facial-recognition software transactions, mobile-payment systems, touchless transactions, and digital wallet. He is also steering the company towards better customer experiences banking on technology like Big Data and Data Analytics, also has set up an innovation lab that furthers MasterCard\'s indulgence into technological adaptations. It has been an eventful journey for this MBA graduate from IIM Ahmadabad, a non-technology leader who nearly after 30 years of experience at global enterprises including Nestle, PepsiCo, and Citicorp, is now leading technological transformations at MaterCard for a world beyond cash.

After his MBA from one of the prestigious management colleges in India, Banga began his career with Nestle India, where for 13 years he served in various roles from sales to management. Later, he spent two years at PepsiCo, where he launched the company\'s fast food franchises. Also, during his stint at Citigroup, Banga held a variety of senior management roles in U.S., Asia Pacific, Europe, Middle East, and Africa, oversaw its efforts in microfinance, before his departure from the banking organization after serving as CEO of Citigroup Asia Pacific. He was appointed as president and COO of MasterCard, later had been named by the Board of Directors to serve as the company\'s president and CEO.

Born into a Sikh family in Khadki outside Pune, Banga, the son of a retired Indian Military General, raised as a Sikh, with his thick black beard and elegant black turban is a rare sight in the MasterCard boardroom meetings. In one instance, during his graduation speech at New York University\'s Stern School of Business, he quipped \"I tend to stand out in a room.\" \"Turbans and beards will do that to you.\" He also joked about being randomly searched at airports to be his \"part-time hobby.\"

Driving a culture of innovation at MasterCard

Banga, strongly advocates technological innovation in his move to get the customers choose credit over cash, and select MasterCard for credit. He launched MasterCard Labs, an in-house research arm in 2010 while he was COO at the organization. Banga lead the development of PayPass, a contactless technology, MasterPass, a digital wallet service. While many of the competitors like Visa, Square, and PayPal are offering digital Wallets, Banga is betting on MasterPass, as it is the MasterCard\'s biggest digital push yet, with frequent product updates, the ability to purchase from within apps and digital ads. Another innovative product to roll out of MasterCard Labs is ShopThis, that lets the users purchase the items directly from the magazine app. There are myriad of such innovations that are taking place at MasterCard under leadership of Banga, for instance, the inControl app lets the users carry just one MasterCard, and use it as both credit as well as debit card in accordance to the convenience.

Innovating for Inclusion

Banga, in his key note address at Mobile World Congress Barcelona, Spain, said that there is huge injustice in financial inclusion. \"Financial inclusion matters because without it large swaths of people are left behind. More than 2.5 billion people don\'t have a bank account and millions more don\'t use their bank accounts regularly. That\'s half the world\'s adult population,\" he said. He further elaborated that financial inclusion isn\'t just a developing market issue that requires offering low-income developing countries a full range of financial services - savings, payment and transfer services, credit, and insurance - at an affordable, competitive cost. \"This is a huge undertaking considering only 24 of adults in places like Sub-Saharan Africa have a bank account. And it\'s not just an issue for developing countries: Nearly 70 million Americans and 100 million Western Europeans are also unbanked or underbanked,\" he adds.

In his view, the present generation should shoulder the responsibility of financial inclusion. \"Other generations have eradicated disease, invented radio and television and the telephone,\" states Banga. \"The opportunity to drive financial inclusion is unique to us and our time.\" The key to achieve, as he ad further, lies in the digital payment programs that are supported by the local government. Banga also sketched the MasterCardís innovative projects that support the financial inclusion cause.

The organization has launched HomeSend, a joint venture with eServGlobal and BICS, the innovative solutions providers for mobile and financial service. HomeSend enables consumers to transfer money between mobile money accounts, payments cards, bank accounts, and cash outlets regardless of location or carrier. The company has announced two new programs in Nigeria and Zimbabwe. Also, MasterCard has partnered with mobile network operators in Brazil and CAIXA, one of the biggest banks in Brazil, enabling the citizens to receive government benefits through their mobile devices. Banga also received a grant from the Bill and Melinda Gates foundation for MasterCard Labs, which will be used to extend financial services people across East Africa. Also, MasterCard and the Egyptian government are working on a digital ID program that links the citizens\' national IDs to the existing national mobile money platform. Banga remarked noted towards the end of his key note, \"We can bend the arc of history towards financial inclusion and a world where more people have the opportunity to enjoy what we take for granted, but it takes all of us working together.\"

Banga, the person with many accolades

In 2014, Banga was the only Indian-origin person on Harvard Magazine\'s annual best-performing CEOs in the world list. The list comprises global CEOs who delivered solid results over the long run. In 2010, Under Banga, MasterCard\'s total shareholder return was 169 per cent while market capitalization grew by $66 billion.

Also in February, this year, Barack Obama, the President of U.S. appointed Banga as a member of the Advisory Committee for Trade Policy and Negotiations, a key position in the administration. Furthermore, he is the current chairman of the U.S.-India Business Council and a fellow of the Foreign Policy Association, was awarded the Foreign Policy Association Medal in 2012.
Banga is member of International Business Council of the World Economic Forum, the Council on Foreign Relations and the Economic Club of New York. He also serves on the Executive Committee of the Business Roundtable; and is vice chair of the Financial Services Roundtable. There are numerous such accolades that the Banga has garnered over the years for his broader vision that not only focused the growth of the company he worked for but also helped address social development issues such as financial inclusion and helping the world go beyond cash.