Day-to-day devices will soon pay for goods and services for themselves. Ed McLaughlin, president of operations and technology at Mastercard, is feeding the payment processing platform for this to happen.
Ed McLaughlin envisions a frictionless trading future in which cars will pay for gas and parking, video game systems order more games and printers will order paper and ink. “Each of these connected devices is a trading device. We see that they are only woven into all sorts of new experiences to make it easier and more convenient for consumers,” McLaughlin tells CIO.com.
McLaughlin, who was promoted from CIO to president of operations and technology, and his team are preparing for a time when processing payments through an Internet trading network becomes the rule rather than the exception. It ensures that Mastercard analyzes hard and soft trends to anticipate with what new devices or modes the company’s payment platform should work.
Trace the future of payment services
“We would literally write all the devices on the board, simply with an EMV chip card,” says McLaughlin. This “anticipatory IT” approach was important in the celebration of the CIO100,where analyst Daniel Burrus introduced the concept during an opening session. The thesis is simple, if not ignored by CIO and executives: the change is linear, exponential and predictable, 93% of companies consider it.
This does not mean that Mastercard is no longer pushing over digital payments. Ways have been proven to allow consumers to pay in many ways. And it’s currently allowing anything from non-contact payments through smartphones to retail stores and digital payments through fingerprints and selfie photos. Most recently, Mastercard reached an agreement to process contactless payments through Fitbit smartwatches .
As a CIO, McLaughlin helped lay the foundation for these initiatives and contextual commerce with a service-oriented architecture driven by application programming interfaces (APIs), giving Mastercard the ability to easily create new services and connect to new custom devices available.
The company has a more open working model, in which the teams are located by projects instead of functions (sales, marketing, IT, HR, etc.). Such collaboration workspaces and business processes encourage the development of agile software, a necessary ingredient for the company to perform digital transformations. As a productivity game, McLaughlin is exploring how to use artificial intelligence (AI) and automatic learning (ML) to automate traditional business processes. Payment processors offer little value if they can not guarantee a reliable transaction at the speed of light.
Mastercard is also deploying AI and ML to detect anomalies and thwart scammers attempting, for example, hacking and draining ATMs. MDES allows any connected device to make and receive payments protected by tokens or card numbers that use mobile devices instead of the card number printed on the plastic. MDES validates the transaction, assigns the token back to the main account number and forwards it to the issuer for authorization.
If a plastic card does not work on a payment terminal, you never know. However, if the payment is non-contact through a smartphone, usable or some other connected device, Mastercard will know if a payment has stalled, allowing you to analyze and determine why. As the mobile becomes a sensor, it can know the intended purchase when it actually happens, so in real time I have a sensor on the edge of my network that could never get into the plastic for a terminal, “says McLaughlin .